March 8, 2017. G.R. No. 211504.* agreeing to submit their dispute to voluntary arbitration.
The CIAC Revised Rules clarifies, however, that the
FEDERAL BUILDERS, INC., petitioner, vs. POWER
FACTORS, INC., respondent.
Construction Industry Arbitration Commission;
Jurisdiction; Under the Construction Industry Arbitration
Commission Revised Rules of Procedure Governing
Construction Arbitration (CIAC Revised Rules), all that is
required for the CIAC to acquire jurisdiction is for the
parties of any construction contract to agree to submit their
dispute to arbitration.—The need to establish a proper
arbitral machinery to settle disputes expeditiously was
recognized by the Government in order to promote and
maintain the development of the country’s construction
industry. With such recognition came the creation of the
CIAC through Executive Order No. 1008 (E.O. No. 1008),
also known as The Construction Industry Arbitration
Law. Section 4 of E.O. No. 1008 provides: Sec.
4. Jurisdiction.—The CIAC shall have original and
exclusive jurisdiction over disputes arising from, or
connected with, contracts entered into by parties involved
in construction in the Philippines, whether the dispute
arises before or after the completion of the contract, or after
the abandonment or breach thereof. These disputes may
involve government or private contracts. For the Board to
acquire jurisdiction, the parties to a dispute must agree to
submit the same to voluntary arbitration. x x x Under the
CIAC Revised Rules of Procedure Governing Construction
Arbitration (CIACRevised Rules), all that is required for the
CIAC to acquire jurisdiction is for the parties of any
construction contract to agree to submit their dispute to
arbitration. Also, Section 2.3 of the CIAC Revised
Rules states that the agreement may be reflected in an
arbitration clause in their contract or by subsequently
agreement of the parties to submit their dispute to
arbitration need not be signed or be formally agreed upon in
the contract because it can also be in the form of other
modes of communication in writing.
_______________
* THIRD DIVISION.
79
VOL. 820, MARCH 8, 2017 79
Federal Builders, Inc. vs. Power Factors, Inc.
Same; Same; Executive Order (EO) No. 1008
emphasizes that the modes of voluntary dispute resolution
like arbitration are always preferred because they settle
disputes in a speedy and amicable manner.—The liberal
application of procedural rules as to the form by which the
agreement is embodied is the objective of the CIAC Revised
Rules. Such liberality conforms to the letter and spirit of
E.O. No. 1008 itself which emphasizes that the modes of
voluntary dispute resolution like arbitration are always
preferred because they settle disputes in a speedy and
amicable manner. They likewise help in alleviating or
unclogging the judicial dockets. Verily, E.O. No. 1008
recognizes that the expeditious resolution of construction
disputes will promote a healthy partnership between the
Government and the private sector as well as aid in the
continuous growth of the country considering that the
construction industry provides employment to a large
segment of the national labor force aside from its being a
leading contributor to the gross national product.
 Same; Same; Construction Disputes; Section 2.1, Rule 2
of the Construction Industry Arbitration Commission
(CIAC) Revised Rules particularly specifies that the CIAC
has original and exclusive jurisdiction over construction
disputes, whether such disputes arise from or are
merely connected with the construction contracts entered
into by parties, and whether such disputes
arise before or after the completion of the contracts.—Worthy
to note is that the jurisdiction of the CIAC is over the
dispute, not over the contract between the parties. Section
2.1, Rule 2 of the CIAC Revised Rulesparticularly specifies
that the CIAC has original and exclusive jurisdiction
over construction disputes, whether such disputes
arise from or are merelyconnected with the construction
contracts entered into by parties, and whether such
disputes arise before or after the completion of the
contracts. Accordingly, the execution of the contracts and
the effect of the agreement to submit to arbitration are
different matters, and the signing or non-signing of one
does not necessarily affect the other. In other words, the
formalities of the contract have nothing to do with the
jurisdiction of the CIAC.
Civil Law; Contracts; A contract does not need to be in
writing in order to be obligatory and effective unless the law
specifically requires so.—Under Article 1318 of the Civil
Code, a valid contract should have the following essential
elements, namely: (a) consent of the contracting parties;
(b) object certain that is the subject matter of
80
80 SUPREME COURT REPORTS
ANNOTATED
Federal Builders, Inc. vs. Power Factors, Inc.
the contract; and (c) cause or consideration. Moreover,
a contract does not need to be in writing in order to be
obligatory and effective unless the law specifically requires
so. Pursuant to Article 1356 and Article 1357 of the Civil
Code,contracts shall be obligatory in whatever form they
may have been entered into, provided that all the essential
requisites for their validity are present. Indeed, there was a
contract between Federal and Power even if the Contract of
Service was unsigned. Such contract was obligatory and
binding between them by virtue of all the essential
elements for a valid contract being present.
Construction Industry Arbitration Commission;
Jurisdiction; Although the agreement to submit to
arbitration has been expressly required to be in writing and
signed by the parties therein by Section 4 of Republic Act
(RA) No. 876 (Arbitration Law), the requirement is
conspicuously absent from the Construction Industry
Arbitration Commission (CIAC) Revised Rules, which even
expressly allows such agreement not to be signed by the
parties therein.—The agreement contemplated in the
CIAC Revised Rules to vest jurisdiction of the CIAC over
the parties’ dispute is not necessarily an arbitration clause
to be contained only in a signed and finalized construction
contract. The agreement could also be in a separate
agreement, or any other form of written communication, as
long as their intent to submit their dispute to arbitration is
clear. The fact that a contract was signed by both parties
has nothing to do with the jurisdiction of the CIAC, and this
is the explanation why the CIACRevised Rules itself
expressly provides that the written communication or
agreement need not be signed by the parties. Although the
agreement to submit to arbitration has been expressly
required to be in writing and signed by the parties therein
by Section 4 of Republic Act No. 876 (Arbitration Law), the
requirement is conspicuously absent from the CIAC Revised
Rules, which even expressly allows such agreement not to
be signed by the parties therein.Brushing aside the obvious
contractual agreement in this case warranting the
submission to arbitration is surely a step
backward. Consistent with the policy of encouraging
alternative dispute resolution methods, therefore, any
doubt should be resolved in favor of arbitration. In this
connection, the CA correctly observed that the act of Atty.
Albano in manifesting that Federal had agreed to the form
of arbitration was unnecessary and inconsequential
considering the recognition of the value of the Contract of
Service despite its being an unsigned draft.
81
VOL. 820, MARCH 8, 2017 81
Federal Builders, Inc. vs. Power Factors, Inc.
PETITION for review on certiorari of a decision of the
Court of Appeals.
The facts are stated in the opinion of the Court.
Atienza, Formento, Aquino & Alzate for petitioner.
Erlich V. Barraquias for respondent.
BERSAMIN, J.:
An agreement to submit to voluntary arbitration for
purposes of vesting jurisdiction over a construction dispute
in the Construction Industry Arbitration Commission
(CIAC) need not be contained in the construction contract,
or be signed by the parties. It is enough that the agreement
be in writing.
The Case
Federal Builders, Inc. (Federal) appeals to reverse the
decision promulgated on August 12, 2013,1 whereby the
Court of Appeals (CA) affirmed the adverse decision
rendered on May 12, 2010 by the Construction Industry
Arbitration Commission (CIAC) with modification of the
total amount awarded.2
Antecedents
Federal was the general contractor of the Bullion Mall
under a construction agreement with Bullion Investment
and Development Corporation (BIDC). In 2004, Federal
engaged respondent Power Factors, Inc. (Power) as its
subcontractor for the electric works at the Bullion Mall and
the Precinct Building for P18,000,000.00.3
_______________
1 Rollo, pp. 32-45; penned by Associate Justice Leoncia
R. Dimagiba and concurred in by Associate Justices
Rosmari D. Carandang and Ricardo R. Rosario.
2 Id., at pp. 98-128.
3 Id., at p. 33.
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82 SUPREME COURT REPORTS
ANNOTATED
Federal Builders, Inc. vs. Power Factors, Inc.
On February 19, 2008, Power sent a demand letter to
Federal claiming the unpaid amount of P11,444,658.97 for
work done by Power for the Bullion Mall and the Precinct
Building. Federal replied that its outstanding balance
under the original contract only amounted to
P1,641,513.94, and that the demand for payment for work
done by Power after June 21, 2005 should be addressed
directly to BIDC.4Nonetheless, Power made several
demands on Federal to no avail.
On October 29, 2009, Power filed a request for
arbitration in the CIAC invoking the arbitration clause of
the Contract of Service reading as follows:
ARBITRATION COMMITTEE — All disputes,
controversies or differences, which may arise between the
parties herein, out of or in relation to or in connection with
this Agreement, or for breach thereof shall be settled by the
Construction Industry Arbitration Commission (CIAC)
which shall have original and exclusive jurisdiction over the
aforementioned disputes. 15.5
On November 20, 2009, Atty. Vivencio Albano, the
counsel of Federal, submitted a letter to the CIAC
manifesting that Federal agreed to arbitration and sought
an extension of 15 days to file its answer, which request the
CIAC granted.
On December 16, 2009, Atty. Albano filed his
withdrawal of appearance stating that Federal had
meanwhile engaged another counsel.6
Federal, represented by new counsel (Domingo, Dizon,
Leonardo and Rodillas Law Office), moved to dismiss the
case on the ground that CIAC had no jurisdiction over the
case inasmuch as the Contract of Service between Federal
and Power had been a mere draft that was never finalized
or signed by the parties. Federal contended that in the
absence of the
_______________
4 Id.
5 Id., at p. 44.
6 Id., at pp. 34-35.
83
VOL. 820, MARCH 8, 2017 83
Federal Builders, Inc. vs. Power Factors, Inc.
agreement for arbitration, the CIAC had no jurisdiction to
hear and decide the case.7
On February 8, 2010, the CIAC issued an order setting
the case for hearing, and directing that Federal’s motion to
dismiss be resolved after the reception of evidence of the
parties.8
Federal did not thereafter participate in the proceedings
until the CIAC rendered the Final Award dated May 12,
2010,9disposing:
In summary: Respondent Federal Builders, Inc. is
hereby ordered to pay claimant Power Factors, Inc. the
following sums:
The foregoing amount shall earn legal interest at the
rate of 6% per annum from the date of this Final Award
until this award becomes final and executory, Claimant
shall then be entitled to 12% per annum until the entire
amount is fully satisfied by Respondent.
Federal appealed the award to the CA insisting that the
CIAC had no jurisdiction to hear and decide the case; and
that the amounts thereby awarded to Power lacked legal
and factual bases.
_______________
7 Id., at p. 35.
8 Id.
9 Id., at pp. 98-128.
 to arbitrate need not be signed by the parties; that the
84 consent to submit to voluntary arbitration was not
84 SUPREME COURT REPORTS necessary in view of the arbitration clause contained in the
ANNOTATED Contract of Service; and that Federal’s contention that its
Federal Builders, Inc. vs. Power Factors, Inc. former counsel’s act of manifesting its consent to the
arbitration stipulated in the draft Contract of Service did
On August 12, 2013, the CA affirmed the CIAC’s
not bind it was inconsequential on the issue of
decision with modification as to the amounts due to
jurisdiction.12
Power,10 viz.:
_______________
WHEREFORE, the CIAC Final Award dated 12 May
2010 in CIAC Case No. 31-2009 is
10 Id., at pp. 32-42.
hereby AFFIRMED withMODIFICATION. As modified,
11 Id., at pp. 44-45.
FEDERAL BUILDERS, INC. is ordered to pay POWER
12 Id., at p. 38.
FACTORS, INC. the following:

1. Unpaid balance on the

P4,276,614.75;
original Contract
2. Unpaid balance on change 85
2,864,113.32; VOL. 820, MARCH 8, 2017 85
orders
3. Attorney’s Fees 250,000.00; Federal Builders, Inc. vs. Power Factors, Inc.
4. Cost of Arbitration 149,503.86; Concerning the amounts awarded, the CA opined that
The interest to be imposed on the net award (unpaid the CIAC should not have allowed the increase based on
balance on the original contract and change order) labor-cost escalation because of the absence of the
amounting to P7,140,728.07 awarded to POWER agreement between the parties on such escalation and
FACTORS, INC. shall be six (6%) per annum, reckoned because there was no authorization in writing allowing the
from 4 July 2006 until this Decision becomes final and adjustment or increase in the cost of materials and labor.13
executory. Further, the total award due to POWER After the CA denied Federal’s motion for reconsideration
FACTORS, INC. shall be subjected to an interest of twelve on February 19, 2004,14 Federal has come to the Court on
percent (12%) per annum computed from the time this appeal.
judgment becomes final and executory, until full
satisfaction. Issue
SO ORDERED.11 The issues to be resolved are: (a) whether the CA erred
in upholding CIAC’s jurisdiction over the present case; and
(b) whether the CA erred in holding that Federal was liable
Anent jurisdiction, the CA explained that the to pay Power the amount of P7,140,728.07.
CIACRevised Rules of Procedurestated that the agreement
 Ruling of the Court
The appeal is bereft of merit.
1.
The parties had an effective agreement
to submit to voluntary arbitration;
hence, the CIAC had jurisdiction
The need to establish a proper arbitral machinery to
settle disputes expeditiously was recognized by the
Government in order to promote and maintain the
development of the country’s construction industry. With
such recognition came the creation of the CIAC through
Executive Order No. 1008 (E.O. No. 1008), also known
as The Construction Industry Arbitration Law. Section 4 of
E.O. No. 1008 provides:
_______________
13 Id., at pp. 42-43.
14 Id., at p. 47.
86
86 SUPREME COURT REPORTS
ANNOTATED
Federal Builders, Inc. vs. Power Factors, Inc.
4. Sec.Jurisdiction.—The CIAC shall have original
and exclusive jurisdiction over disputes arising from, or
connected with, contracts entered into by parties involved
in construction in the Philippines, whether the dispute
arises before or after the completion of the contract, or after
the abandonment or breach thereof. These disputes may
involve government or private contracts. For the Board to
acquire jurisdiction, the parties to a dispute must agree to
submit the same to voluntary arbitration. x x x
Under the CIAC Revised Rules of Procedure Governing
Construction Arbitration (CIAC Revised Rules), all that is
required for the CIAC to acquire jurisdiction is for the
parties of any construction contract to agree to submit their
dispute to arbitration.15Also, Section 2.3 of the
CIACRevised Rules states that the agreement may be
reflected in an arbitration clause in their contract or by
subsequently agreeing to submit their dispute to voluntary
arbitration. The CIAC Revised Rules clarifies, however, that
the agreement of the parties to submit their dispute to
arbitration need not be signed or be formally agreed upon in
the contract because it can also be in the form of other
modes of communication in writing,viz.:
RULE 4 – EFFECT OF AGREEMENT TO ARBITRATE
4.1. SECTIONSubmission to CIAC jurisdiction.—An
arbitration clause in a construction contract or a
submission to arbitration of a construction dispute shall be
deemed an agreement to submit an existing or future
controversy to CIAC jurisdiction, notwithstanding the
reference to a different arbitration institution or arbitral
body in such contract or submission.
_______________
15 Rule 4, CIAC Revised Rules;LICOMCEN,
Incorporated v. Foundation Specialists, Inc., G.R. Nos.
167022 & 169678, April 4, 2011, 647 SCRA 83, 97.
87
VOL. 820, MARCH 8, 2017 87
 Federal Builders, Inc. vs. Power Factors, Inc.
When a contract contains a clause for the submission of a
future controversy to arbitration, it is not necessary for the
parties to enter into a submission agreement before the
Claimant may invoke the jurisdiction of CIAC. 4.1.1
An 4.1.2 arbitration agreement or a submission to
arbitration shall be in writing, but it need not be
signed by the parties, as long as the intent is clear
that the parties agree to submit a present or future
controversy arising from a construction contract to
arbitration. It may be in the form of exchange of
letters sent by post or by telefax, telexes, telegrams,
electronic mail or any other mode of communication.
The liberal application of procedural rules as to the form
by which the agreement is embodied is the objective of the
CIACRevised Rules. Such liberality conforms to the letter
and spirit of E.O. No. 1008 itself which emphasizes that the
modes of voluntary dispute resolution like arbitration are
always preferred because they settle disputes in a speedy
and amicable manner. They likewise help in alleviating or
unclogging the judicial dockets. Verily, E.O. No. 1008
recognizes that the expeditious resolution of construction
disputes will promote a healthy partnership between the
Government and the private sector as well as aid in the
continuous growth of the country considering that the
construction industry provides employment to a large
segment of the national labor force aside from its being a
leading contributor to the gross national product.16
Worthy to note is that the jurisdiction of the CIAC is
over the dispute, not over the contract between the
parties.17 Section 2.1, Rule 2 of the CIAC Revised
Rulesparticularly specifies that the CIAC has original and
exclusive jurisdiction overconstruction disputes,whether
such disputes arisefrom or are
_______________
16 See Preambulatory clauses of E.O No. 1008.
17 National Irrigation Administration v. Court of
Appeals,G.R. No. 129169, November 17, 1999, 318 SCRA
255, 267.
88
88 SUPREME COURT REPORTS
ANNOTATED
Federal Builders, Inc. vs. Power Factors, Inc.
merely connected with the construction contracts entered
into by parties, and whether such disputes
arisebefore or after the completion of the contracts.
Accordingly, the execution of the contracts and the effect of
the agreement to submit to arbitration are different
matters, and the signing or non-signing of one does not
necessarily affect the other. In other words, the formalities
of the contract have nothing to do with the jurisdiction of
the CIAC.
Federal contends that there was no mutual consent and
no meeting of the minds between it and Power as to the
operation and binding effect of the arbitration clause
because they had rejected the draft service contract.
The contention of Federal deserves no consideration.
Under Article 1318 of theCivil Code, a valid contract
should have the following essential elements,
namely:(a) consent of the contracting parties; (b) object
certain that is the subject matter of the contract; and (c)
cause or consideration. Moreover, a contract does not need
to be in writing in order to be obligatory and effective
unless the law specifically requires so. Pursuant to Article
135618 and Article 135719 of the Civil Code,contracts shall
be obligatory in whatever form they may have been entered
into, provided that all the essential requisites for their
validity are present. Indeed, there was a contract between
Federal and Power even if the Contract of Ser-
_______________
18 Contracts shall be obligatory, in whatever form they
may have been entered into, provided all the essential
requisites for their validity are present. However, when the
law requires that a contract be in some form in order that it
may be valid or enforceable, or that a contract be proved in
a certain way, that requirement is absolute and
indispensable. In such cases, the right of the parties stated
in the following article cannot be exercised. 1356. Article
19 If the law requires a document or other special form,
as in the acts and contracts enumerated in the following
article, the contracting parties may compel each other to
observe that form, once the contract has been perfected.
This right may be exercised simultaneously with the action
upon the contract. 1357. Article
89
VOL. 820, MARCH 8, 2017 89
Federal Builders, Inc. vs. Power Factors, Inc.
vice was unsigned. Such contract was obligatory and
binding between them by virtue of all the essential
elements for a valid contract being present.
It clearly appears that the works promised to be done by
Power were already executed albeit still incomplete; that
Federal paid Power P1,000,000.00 representing the
originally proposed down payment, and the latter accepted
the payment; and that the subject of their dispute
concerned only the amounts still due to Power. The records
further show that Federal admitted having drafted the
Contract of Services containing the following clause on
submission to arbitration, to wit:
ARBITRATION COMMITTEE — All disputes,
controversies or differences, which may arise between the
Parties herein, out of or in relation to or in connection with
this Agreement, or for breach thereof shall be settled by the
Construction Industry Arbitration Commission (CIAC)
which shall have original and exclusive jurisdiction over the
aforementioned disputes. 15.20
With the parties having no issues on the provisions or
parts of the Contract of Service other than that pertaining
to the down payment that Federal was supposed to pay,
Federal could not validly insist on the lack of a contract in
order to defeat the jurisdiction of the CIAC. As earlier
pointed out, the CIACRevised Rules specifically allows any
written mode of communication to show the parties’ intent
or agreement to submit to arbitration their present or
future disputes arising from or connected with their
contract.
The CIAC and the CA both found that the parties had
disagreed on the amount of the down payment. On its part,
Power indicated after receiving and reviewing the draft of
the Contract of Service that it wanted 30% as the down
payment. Even so, Power did not modify anything else in
the draft, and
_______________
20 Rollo, p. 34.

90
90 SUPREME COURT REPORTS
ANNOTATED
Federal Builders, Inc. vs. Power Factors, Inc.
returned the draft to Federal after signing it. It was
Federal that did not sign the draft because it was not
amenable to the amount as modified by Power. It is notable
that the arbitration clause written in the draft of Federal
was unchallenged by the parties until their dispute arose.
Moreover, Federal asserted the original contract to
support its claim against Power. If Federal would insist
that the remaining amount due to Power was only
P1,641,513.94 based on the original contract,21 it was really
inconsistent for Federal to rely on the draft when it is
beneficial to its side, and to reject its efficacy and existence
just to relieve itself from the CIAC’s unfavorable decision.
The agreement contemplated in the CIACRevised
Rules to vest jurisdiction of the CIAC over the parties’
dispute is not necessarily an arbitration clause to be
contained only in a signed and finalized construction
contract. The agreement could also be in a separate
agreement, or any other form of written communication, as
long as their intent to submit their dispute to arbitration is
clear. The fact that a contract was signed by both parties
has nothing to do with the jurisdiction of the CIAC, and this
is the explanation why the CIACRevised Rules itself
expressly provides that the written communication or
agreement need not be signed by the parties.
Although the agreement to submit to arbitration has
been expressly required to be in writing and signed by the
parties therein by Section 422 of Republic Act No.
876(Arbitration
_______________
21 Id.
22 4. SectionForm of arbitration agreement.—A
contract to arbitrate a controversy thereafter arising
between the parties, as well as a submission to arbitrate an
existing controversy, shall be in writing and subscribed by
the party sought to be charged, or by his lawful agent.
The making of a contract or submission for arbitration
described in Section two hereof, providing for arbitration of
any controversy, shall be deemed a consent of the parties of
the province or city where any of the parties resides, to
enforce such contract of submission.
91
VOL. 820, MARCH 8, 2017 91
Federal Builders, Inc. vs. Power Factors, Inc.
Law),23 the requirement is conspicuously absent from the
CIAC Revised Rules,which even expressly allows such
agreement not to be signed by the parties
therein. Brushing
24 aside the obvious contractual
agreement in this case warranting the submission to
arbitration is surely a step backward.25 Consistent with the
policy of encouraging alternative dispute resolution
methods, therefore, any doubt should be resolved in favor of
arbitration.26 In this connection, the CA correctly observed
that the act of Atty. Albano in manifesting that Federal had
agreed to the form of arbitration was unnecessary and
inconsequential considering the recognition of the value of
the Contract of Service despite its being an unsigned draft.
2.
Amounts as modified by the CA are correct
 We find no reversible error regarding the amounts as
modified by the CA. Power did not sufficiently establish
that the change or increase of the cost of materials and
labor was to be separately determined and approved by
both parties as provided under Article 1724 of the Civil
Code. As such, Federal should not be held liable for the
labor cost escalation.
WHEREFORE, the Court AFFIRMS the decision
promulgated on August 12, 2013; andORDERS the
petitioner to pay the costs of suit.
SO ORDERED.
_______________
23 AN ACT TO AUTHORIZE THE MAKING OF ARBITRATION
AND SUBMISSION AGREEMENTS, TO PROVIDE FOR THE
APPOINTMENT OF ARBITRATORS AND THE PROCEDURE FOR
ARBITRATION IN CIVIL CONTROVERSIES, AND FOR OTHER
PURPOSES, June 19, 1953.
24 Subsection 4.1.2, Rule 4 of the CIAC Revised Rules.
25 LM Power Engineering Corporation v. Capitol
Industrial Construction Groups, Inc., G.R. No. 141833,
March 26, 2003, 399 SCRA 562, 569.
26 Id., at pp. 569-570.
Notes.—It is widely known that in the construction
industry, a project employee’s work depends on the
availability of projects, necessarily the duration of his
employment. (Malicdem vs. Marulas Industrial
Corporation, 717 SCRA 563 [2014])
The jurisdiction of the Construction Industry Arbitration
Commission (CIAC) is derived from law. It is broad enough
to cover any dispute arising from, or connected with
construction contracts, whether these involve mere
contractual money claims or execution of the works.
(Philippine Race Horse Trainer’s Association, Inc. vs.
Piedras Negras Construction & Development Corporation,
775 SCRA 631 [2015])
——o0o——
© Copyright 2019 Central Book Supply, Inc. All rights

92
92 SUPREME COURT REPORTS
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Federal Builders, Inc. vs. Power Factors, Inc.
Velasco, Jr. (Chairperson), Reyes,
Jardeleza and Caguioa,**JJ., concur.

Judgment affirmed.
 G.R. No. 184295.July 30, 2014.*
NATIONAL TRANSMISSION
CORPORATION, petitioner, vs. ALPHAOMEGA
INTEGRATED CORPORATION, respondent.
Remedial Law; Civil Procedure; Section 1, Rule 45 of
the Rules of Court provides that a petition for review on
certiorari under the said rule, as in this case, “shall raise
only questions of law which must be distinctly set forth.”—
TRANSCO seeks through this petition a recalibration of
the evidence presented before the CIAC Arbitral Tribunal,
insisting that AIC is not entitled to any damages not only
because it had previously waived all claims for standby fees
in case of project delays but had eventually failed to
perform the workable portions of the projects. This is
evidently a factual question which cannot be the proper
subject of the present petition. Section 1, Rule 45 of the
Rules of Court provides that a petition for review
on certiorari under the said rule, as in this case, “shall raise
only questions of law which must be distinctly set forth.”
Thus, absent any of the existing exceptions impelling the
contrary, the Court is, as a
_______________
* SECOND DIVISION.
300
3 SUPREME COURT REPORTS
00 ANNOTATED
National Transmission Corporation vs.
Alphaomega Integrated Corporation
general rule, precluded from delving on factual
determinations, as what TRANSCO essentially seeks in
this case.
Same; Same; It is well-settled that findings of fact of
quasi-judicial bodies, which have acquired expertise because
their jurisdiction is confined to specific matters, are
generally accorded not only respect, but also finality,
especially when affirmed by the Court of Appeals (CA).—The
Court finds no reason to disturb the factual findings of the
CIAC Arbitral Tribunal on the matter of AIC’s entitlement
to damages which the CA affirmed as being well supported
by evidence and properly referred to in the record. It is well-
settled that findings of fact of quasi-judicial bodies, which
have acquired expertise because their jurisdiction is
confined to specific matters, are generally accorded not only
respect, but also finality, especially when affirmed by the
CA. The CIAC possesses that required expertise in the field
of construction arbitration and the factual findings of its
construction arbitrators are final and conclusive, not
reviewable by this Court on appeal.
Same; Same; It is well-settled that no relief can be
granted a party who does not appeal and that a party who
did not appeal the decision may not obtain any affirmative
relief from the appellate court other than what he had
obtained from the lower court, if any, whose decision is
brought up on appeal.—It must be emphasized that the
petition for review before the CA was filed by TRANSCO.
AIC never elevated before the courts the matter concerning
the discrepancy between the amount of the award stated in
the body of the Final Award and the total award shown in
its dispositive portion. The issue was touched upon by the
CA only after AIC raised the same through its Comment
(With Motion to Acknowledge Actual Amount of Award) to
TRANSCO’s petition for review. The CA should not have
modified the amount of the award to favor AIC because it is
well-settled that no relief can be granted a party who does
not appeal and that a party who did not appeal the decision
may not obtain any affirmative relief from the appellate
court other than what he had obtained from the lower
court, if any, whose decision is brought up on appeal. The
disposition, as stated in the fallo of the CIAC Arbitral
Tribunal’s Final Award, should therefore stand.
PETITION for review on certiorari of the decision and
resolution of the Court of Appeals.
301
VOL. 731, JULY 30, 2014 301
National Transmission Corporation vs.
Alphaomega Integrated Corporation
The facts are stated in the opinion of the Court.
Office of the Government Corporate Counsel andNational
Transmission Corporation for petitioner.
Rivera, Santos and Maranan for respondent.
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari[1] are the
Decision[2] dated April 8, 2008 and
Resolution[3]dated August 27, 2008 of the Court of Appeals
(CA) in C.A.-G.R. S.P. No. 99454 affirming with modification
the Final Award[4] of the Construction Industry Arbitration
Commission (CIAC) Arbitral Tribunal in favor of respondent
Alphaomega Integrated Corporation (AIC) by increasing
petitioner National Transmission Corporation’s (TRANSCO)
liability from P17,495,117.44 to P18,896,673.31.
The Facts
AIC, a duly licensed transmission line contractor,
participated in the public biddings conducted by TRANSCO
and was awarded six (6) government construction projects,
namely: (a) Contract for the Construction & Erection of
Batangas Transmission Reinforcement Project Schedule
III (BTRP Schedule III Project); (b) Contract for the
Construction & Erection of Batangas Transmission
Reinforcement Project Schedule I (BTRP Schedule I
Project); (c) Contract for the Construction, Erection &
Installation of 230 KV and 69 KV S/S Equipment and
Various Facilities for Makban Substation under the
_______________
[1] Rollo, pp. 10-82.
[2] Id., at pp. 84-121. Penned by Associate Justice
Arcangelita M. Romilla-Lontok, with Associate Justices
Mariano C. Del Castillo (now member of the Court) and
Ricardo R. Rosario, concurring.
[3] Id., at pp. 123-124.
[4] Id., at pp. 164-248.
302
302 SUPREME COURT REPORTS
ANNOTATED
National Transmission Corporation vs.
Alphaomega Integrated Corporation
Batangas Transmission Reinforcement Project (Schedule II)
the
(Makban Substation Project); (d) Contract for the
Construction, Erection & Installation of 138 & 69 KV S/S
Equipment for Bacolod Substation under the Negros III-
Panay III Substation Projects (Schedule II) (Bacolod
Substation Project); (e) Contract for the Construction,
Erection & Installation of 138 & 69 KV Substation
Equipment for the New Bunawan Switching Station Project
(Bunawan Substation Project); and (f) Contract for the
Construction, Erection & Installation of 138 and 69 KV
Substation Equipment for Quiot Substation Project (Quiot
Substation Project).[5]
In the course of the performance of the contracts, AIC
encountered difficulties and incurred losses allegedly due to
TRANSCO’s breach of their contracts, prompting it to
surrender the projects to TRANSCO under protest. In
accordance with an express stipulation in the contracts that
disagreements shall be settled by the parties through
arbitration before the CIAC, AIC submitted a request for
arbitration before the CIAC on August 28, 2006, and,
thereafter, filed an Amended Complaint against TRANSCO
alleging that the latter breached the contracts by its failure
to: (a) furnish the required Detailed Engineering; (b)
arrange a well-established right-of-way to the project areas;
(c) secure the necessary permits and clearances from the
concerned local government units (LGUs); (d) ensure a
continuous supply of construction materials; and (e) carry
out AIC’s requests for power shut down. The
aforementioned transgressions resulted in protracted
delays and contract suspensions for each project,[6] as
follows:
_______________
[5] Id., at pp. 85-86.
[6] Id., at pp. 87-89.
303
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National Transmission Corporation vs.
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AIC prayed for judgment declaring all six (6) contracts
rescinded and ordering TRANSCO to pay, in addition to
what had already been paid under the contracts, moral
damages, exemplary damages, and attorney’s fees at
P100,000.00 each, and a total of P40,201,467.19 as actual
and compensatory damages.[8]
TRANSCO, for its part, contended that: (a) it had
conducted Detailed Engineering prior to the conduct of the
bidding; and (b) it had obtained the necessary government
permits and endorsements from the affected LGUs. It
asserted that AIC was guilty of frontloading — that is,
collecting the bulk of the contract price for work
accomplished at the early stages of the project and then
abandoning the later stages of the project which has a lower
contract price[9]— and that it disregarded the workable
portions of the projects not affected by the lack of supplies
and drawings. TRANSCO further argued that AIC was
estopped from asking for standby fees to cover its overhead
expenses during project suspensions considering that the
delays, such as the unresolved right-of-way
_______________
[7] Id., at p. 87.
[8] Id., at pp. 95-96.
[9] Id., at p. 98.
304
304 SUPREME COURT REPORTS
ANNOTATED
National Transmission Corporation vs.
Alphaomega Integrated Corporation
issues and nonavailability of materials, were factors
already covered by the time extensions and suspensions of
work allowed under the contracts.[10]
On April 18, 2007, the CIAC Arbitral Tribunal rendered
its Final Award[11]in CIAC Case No. 21-2006 ordering the
payment of actual and compensatory damages which AIC VOL. 731, JULY 30, 2014 305
would not have suffered had it not been for the project National Transmission Corporation vs.
delays attributable to TRANSCO. It found ample evidence Alphaomega Integrated Corporation
to support the claim for the increase in subcontract cost in WHEREFORE, Respondent, National Transmission
BTRP Schedule I, as well as such items of cost as house and Corporation [TRANSCO] is hereby ordered to pay
yard rentals, electric bills, water bills, and maintained Claimant, Alphaomega Integrated Corporation, the
personnel, but disallowed the claims for communications following sums:
bills, maintenance costs for idle equipment, finance
charges, and materials cost increases.[12] According to the
Arbitral Tribunal, even if AIC itself made the requests for
contract time extensions, this did not bar its claim for
damages as a result of project delays since a contrary ruling
would allow TRANSCO to profit from its own negligence
and leave AIC to suffer serious material prejudice as a
direct consequence of that negligence leaving it without any
remedy at law.[13] The Arbitral Tribunal upheld AIC’s Each Party shall shoulder its own cost of arbitration.
right to rescind the contracts in accordance with Resolution The foregoing amount of P17,495,117.44 shall earn interest
No. 018-2004 of the Government Procurement Policy Board at the rate of six percent (6%) per annum from the date of
(GPPB), which explicitly gives the contractor the right to promulgation of this Final Award until it becomes final and
terminate the contract if the works are completely stopped executory. Thereafter, the Final Award, including accrued
for a continuous period of at least 60 calendar days, through interest, shall earn interest at the rate of 12% per
no fault of its own, due to the failure of the procuring entity annum until the entire amount due is fully
to deliver within a reasonable time, supplied materials, paid.[15] (Emphasis supplied)
right-of-way, or other items that it is obligated to furnish
Unconvinced, TRANSCO instituted a petition for
under the terms of the contract, among others.[14] The
review[16] with the CA.
dispositive portion of the Arbitral Tribunal’s Final Award
Before filing its comment[17] to the
reads:
petition, AIC moved for the issuance of a writ of
_______________
execution,[18] not for the amount of P17,495,117.44
[10] Id.
awarded in the Final Award, but for the increased
[11] Id., at pp. 164-248.
amount of P18,967,318.49.[19] It sought correction of the
[12] Id., at pp. 244-246.
discrepancies between the amount of the award appearing
[13] Id., at p. 229.
in the dispositive portion[20] and the body of the
[14] Id., at p. 227.
_______________
305 [15] Id., at p. 248.
 [16] Id., at pp. 252-312. Dated June 12, 2007.
[17] Id., at pp. 313-343. Comment (With Motion to
Acknowledge Actual Amount of Award) Dated August 24,
2007.
[18] Id., at pp. 344-349. Motion for Issuance of Writ of
Execution for the Total Amount of P18,967,318.49 as
Embodied in the Final Award dated June 13, 2007.
[19] Id., at p. 349.
[20] Id., at p. 248.
306
306 SUPREME COURT REPORTS
ANNOTATED
National Transmission Corporation vs.
Alphaomega Integrated Corporation
Final Award.[21] The Arbitral Tribunal, however, denied
AIC’s motion, holding that while the CIAC Revised Rules of
Procedure Governing Construction Arbitration (CIAC
Rules) would have allowed the correction of the Final
Award for evident miscalculation of figures, typographical
or arithmetical errors, AIC failed to file its motion for
the purpose within the time limitation of 15 days
from its receipt of the Final Award.[22]
The CA’s Ruling
In the Decision[23] dated April 8, 2008, the CA affirmed
the Arbitral Tribunal’s factual findings that TRANSCO
failed to exercise due diligence in resolving the problems
regarding the right-of-way and the lack of materials before
undertaking the bidding process and entering into the
contracts with AIC.[24] It found no merit in TRANSCO’s
allegation that AIC refused to perform the remaining
workable portions of the projects not affected by problems of
right-of-way, shutdowns, supplies and drawings, firstly,
because the certificates of accomplishments issued by
TRANSCO in the course of project implementation
signifying its satisfaction with AIC’s performance negate
such claim and, secondly, because all the orders issued by
TRANSCO suspended the contracts not only in part but in
their entirety, thus, permitting no work activity at all
during such periods.[25]
The CA upheld the Arbitral Tribunal’s Final Award as
having been sufficiently established by evidence but
modified the total amount of the award after noting a
supposed mathematical error in the computation.
Setting aside
_______________
[21] Id., at pp. 245-246.
[22] Id., at pp. 350-352. Order dated June 18, 2007
issued by Chairman Custodio O. Parlade.
[23] Id., at pp. 84-121.
[24] Id., at pp. 112-113.
[25] Id., at pp. 117-118.
307
VOL. 731, JULY 30, 2014 307
National Transmission Corporation vs.
Alphaomega Integrated Corporation
TRANSCO’s objections, it ruled that when a case is brought
to a superior court on appeal every aspect of the case is
thrown open for review,[26] hence, the subject error could
be rectified. The CA held that the correct amount of the
award should be P18,896,673.31, and not P17,495,117.44 as
stated in the Arbitral Tribunal’s Final Award.[27]
Dissatisfied, TRANSCO moved for
reconsideration[28]but was, however, denied by the CA in a
Resolution[29]dated August 27, 2008, hence, the instant
petition.
The Issues Before the Court
 The essential issues for the Court’s consideration are
whether or not the CA erred (a) in affirming the CIAC
Arbitral Tribunal’s findings that AIC was entitled to its
claims for damages as a result of project delays, and (b) in
increasing the total amount of compensation awarded in
favor of AIC despite the latter’s failure to raise the allegedly
erroneous computation of the award before the CIAC in a
timely manner, that is, within fifteen (15) days from receipt
of the Final Award as provided under Section 17.1 of the
CIAC Rules.
The Court’s Ruling
TRANSCO seeks through this petition a recalibration
of the evidence presented before the CIAC Arbitral
Tribunal, insisting that AIC is not entitled to any damages
not only because it had previously waived all claims for
standby fees in case of project delays but had eventually
failed to perform the workable portions of the projects. This
is evidently a factual question which cannot be the proper
subject of the present petition. Section 1, Rule 45 of the
Rules of Court provides that
_______________
[26] Id., at p. 119.
[27] Id., at pp. 119-120.
[28] See Motion for Reconsideration dated April 29,
2008; id., at pp. 125-155
[29] Id., at pp. 123-124.
308
308 SUPREME COURT REPORTS
ANNOTATED
National Transmission Corporation vs.
Alphaomega Integrated Corporation
a petition for review on certiorari under the said rule, as in
this case, “shall raise only questions of law which must be
distinctly set forth.” Thus, absent any of the existing
exceptions impelling the contrary, the Court is, as a general
rule, precluded from delving on factual determinations, as
what TRANSCO essentially seeks in this case. Similar to
the foregoing is the Court’s ruling in Hanjin Heavy
Industries and Construction Co., Ltd. v. Dynamic Planners
and Construction Corp.,[30] the pertinent portions of which
are hereunder quoted:
Dynamic maintains that the issues Hanjin raised in its
petitions are factual in nature and are, therefore, not
proper subject of review under Section 1 of Rule 45,
prescribing that a petition under the said rule, like the one
at bench, “shall raise only questions of law which must be
distinctly set forth.”
Dynamic’s contention is valid to point as, indeed,
the matters raised by Hanjin are factual, revolving as
they do on the entitlement of Dynamic to the awards
granted and computed by the CIAC and the CA.
Generally, this would be a question of fact that this
Court would not delve upon. Imperial v.
Jaucian suggests as much. There, the Court ruled that the
computation of outstanding obligation is a question of fact:
Arguing that she had already fully paid the loan x x x,
petitioner alleges that the two lower courts misappreciated
the facts when they ruled that she still had an outstanding
balance of P208,430.
This issue involves a question of fact. Such question
exists when a doubt or difference arises as to the truth or
the falsehood of alleged facts; and when there is need for
a calibration of the evidence, considering mainly the
credibility of witnesses and the existence
_______________
[30] 576 Phil. 502; 553 SCRA 541 (2008).
309
VOL. 731, JULY 30, 2014 309
National Transmission Corporation vs.
Alphaomega Integrated Corporation
and the relevancy of specific surrounding circumstances,
their relation to each other and to the whole, and the
probabilities of the situation. (G.R. No. 149004, April 14,
2004, 427 SCRA 517, 523-524.)
The rule, however, precluding the Court from delving on
the factual determinations of the CA, admits of several
exceptions. In Fuentes v. Court of Appeals, we held that the
findings of facts of the CA, which are generally deemed
conclusive, may admit review by the Court in any of the
following instances, among others:
(1) when the factual findings of the
[CA] and the trial court are
contradictory;
(2) when the findings are grounded
entirely on speculation, surmises, or
conjectures;
(3) when the inference made by the
[CA] from its findings of fact is
manifestly mistaken, absurd, or
impossible;
(4) when there is grave abuse of
discretion in the appreciation of
facts;
(5) when the [CA], in making its
findings, goes beyond the issues of
the case, and such findings are
contrary to the admissions of both
appellant and appellee;
(6) when the judgment of the [CA] is
premised on a misapprehension of
facts;
(7) when the [CA] fails to notice
certain relevant facts which, if
properly considered, will justify a
different conclusion;
(8) when the findings of fact are
themselves conflicting;
(9) when the findings of fact are
conclusions without citation of the
specific evidence on which they are
based; and
(10) when the findings of fact of the
[CA] are premised on the absence of
evidence but such findings are
contradicted by the
310
310 SUPREME COURT REPORTS
ANNOTATED
National Transmission Corporation vs.
Alphaomega Integrated Corporation
evidence on record. (G.R. No. 109849,
February 26, 1997, 268 SCRA 703,
709.)
Significantly, jurisprudence teaches that
mathematical computations as well as the propriety
of the arbitral awards are factual determinations.
And just as significant is that the factual findings of the
CIAC and CA — in each separate appealed decisions —
practically dovetail with each other. The perceptible
essential difference, at least insofar as the CIAC’s Final
Award and the CA Decision in C.A.-G.R. S.P. No. 86641 are
concerned, rests merely on mathematical computations or
adjustments of baseline amounts which the CIAC may have
inadvertently utilized.[31] (Emphases and underscoring
supplied)
In any case, the Court finds no reason to disturb the
factual findings of the CIAC Arbitral Tribunal on the
matter of AIC’s entitlement to damages which the CA
affirmed as being well supported by evidence and properly
referred to in the record. It is well-settled that findings of
fact of quasi-judicial bodies, which have acquired expertise
because their jurisdiction is confined to specific matters, are
generally accorded not only respect, but also finality,
especially when affirmed by the CA.[32] The CIAC
possesses that required expertise in the field of construction
arbitration and the factual findings of its construction
arbitrators are final and conclusive, not reviewable by this
Court on appeal.[33]
While the CA correctly affirmed in full the CIAC
Arbitral Tribunal’s factual determinations, it improperly
modified the amount of the award in favor of AIC,
which modifi-
_______________
[31] Id., at pp. 519-520.
[32] Public Estates Authority v. Uy, 423 Phil. 407, 416;
372 SCRA 180, 189 (2001).
[33] Shinryo (Philippines) Company, Inc. v. RRN
Incorporated, G.R. No. 172525, October 20, 2010, 634 SCRA
123, 130, citing IBEX International, Inc. v. Government
Service Insurance System, 618 Phil. 306, 312; 603 SCRA
306, 314 (2009).
311
VOL. 731, JULY 30, 2014 311
National Transmission Corporation vs.
Alphaomega Integrated Corporation
cation did not observe the proper procedure for the
correction of an evident miscalculation of figures,
including typographical or arithmetical errors, in
the arbitral award. Section 17.1 of the CIAC Rules
mandates the filing of a motion for the foregoing purpose
within fifteen (15) days from receipt thereof, viz.:
17.1 Section Motion for correction of final award.—Any of
the parties may file a motion for correction of the Final
Award within fifteen (15) days from receipt thereof upon
any of the following grounds:
a.An evident miscalculation of figures, a
typographical or arithmetical error; (Emphasis
supplied)
xxxx
Failure to file said motion would consequently render
the award final and executory under Section 18. 1 of the
same rules, viz.:
18.1 Section Execution of Award.—A final arbitral
award shall become executory upon the lapse of fifteen (15)
days from receipt thereof by the parties.
AIC admitted that it had ample time to file a motion
for correction of the Final Award but claimed to have
purposely sat on its right to seek correction supposedly as a
strategic move against TRANSCO[34]and, instead, filed
with the CIAC Arbitral Tribunal on June 13, 2007 a
“Motion for Issuance of Writ of Execution for the Total
Amount of P18,967,318.49 as Embodied in the Final
Award.”[35] The Arbitral Tribunal eventually denied AIC’s
aforesaid motion for execution because, despite its merit,
the Arbitral Tribunal could not disregard the time-
limitation under the CIAC Rules.[36] Clearly, having failed modified the amount of the award to favor AIC because it is
to move for the correction of the Final Award and, well-settled that no relief can be granted a party who does
_______________ not appeal[41] and that a party who did not appeal the
[34] See Rollo, p. 348. decision may not obtain any affirmative relief from the
[35] Id., at pp. 344-349. appellate court other than what he had obtained from the
[36] Id., at p. 250. lower court, if any, whose decision is
_______________
312 [37] Soler v. Bastida, No. L-22822, March 19, 1925, 47
312 SUPREME COURT REPORTS Phil. 676. See also National Bank v. De la Viña, 46 Phil. 63
ANNOTATED (1924).
National Transmission Corporation vs. [38] Office of the Ombudsman v. Chavez, G.R. No.
Alphaomega Integrated Corporation 172206, July 3, 2013, 700 SCRA 409.
thereafter, having opted to file instead a motion for [39] Rollo, pp. 252-312.
execution of the arbitral tribunal’s unopposed and [40] Id., at pp. 318-343.
uncorrected Final Award, AIC cannot now question against [41] Pascual v. Ramos, G.R. No. 144712, July 4, 2002,
the correctness of the CIAC’s disposition. Notably, while 384 SCRA 105, 116.
there is jurisprudential authority stating that “[a] clerical
313
error in the judgment appealed from may be corrected by
VOL. 731, JULY 30, 2014 313
the appellate court,”[37] the application of that rule cannot
be made in this case considering that the CIAC Rules National Transmission Corporation vs.
provides for a specific procedure to deal with particular Alphaomega Integrated Corporation
errors involving “[a]n evident miscalculation of figures, a brought up on appeal.[42]The disposition, as stated in
typographical or arithmetical error.” Indeed, the rule is well the fallo of the CIAC Arbitral Tribunal’s Final Award,
entrenched: Specialis derogat generali. When two rules should therefore stand.[43]
apply to a particular case, that which was specially WHEREFORE, the petition is PARTLY
designed for the said case must prevail over the other.[38] GRANTED. The Decision dated April 8, 2008 of the Court
Furthermore, it must be emphasized that the petition for of Appeals in C.A.-G.R. S.P. No. 99454 is
review before the CA was filed by TRANSCO.[39] AIC hereby AFFIRMED with MODIFICATION. The
never elevated before the courts the matter concerning the compensation awarded in favor of Alphaomega Integrated
discrepancy between the amount of the award stated in the Corporation in the amount of P17,495,117.44, as shown in
body of the Final Award and the total award shown in its the fallo of the construction Industry Arbitration
dispositive portion. The issue was touched upon by the CA Commission’s Final Award dated April 18, 2007, stands.
only after AIC raised the same through its Comment (With SO ORDERED.
Motion to Acknowledge Actual Amount of Award)[40]to Carpio (Chairperson), Brion,
TRANSCO’s petition for review. The CA should not have Perez and Reyes,** JJ.,concur.
 Petition partly granted, judgment and resolution Gaming Corporation [PAGCOR] vs. Marquez, 698 SCRA
affirmed with modification. 709 [2013])
——o0o——
Notes.—It is axiomatic that a party who does not
appeal, or file a petition for certiorari, is not entitled to any
affirmative relief. (Unilever Philippines, Inc. vs. Rivera, 697
SCRA 136 [2013]) © Copyright 2019 Central Book Supply, Inc. All rights
_______________ reserved.
[42] Daabay v. Coca-Cola Bottlers Phils., Inc., G.R. No.
199890, August 19, 2013, 384 SCRA 105, 116.
[43] “The resolution of the court in a given issue
embodied in the fallo or dispositive part of a decision or
order is the controlling factor as to settlement of rights of
the parties. Thus, where there is a conflict between
the fallo and the ratio decidendi or body of the decision,
the fallo controls. This rule rests on the theory that
the fallo is the final order while the opinion in the body is
merely a statement ordering nothing. The rule applies
when the dispositive part of a final decision or order is
definite, clear, and unequivocal, and can wholly be given
effect without need of interpretation or construction.” (Obra
v. Spouses Badua, 556 Phil. 456, 461; 529 SCRA 621, 629
[2007]; citations omitted)
** Designated additional member in lieu of Justice
Mariano C. Del Castillo per Raffle dated July 23, 2014.

314

314 SUPREME COURT REPORTS

ANNOTATED
National Transmission Corporation vs.
Alphaomega Integrated Corporation
In petitions for review on certiorari under Rule 45 of the
1997 Revised Rules of Civil Procedure, as amended, only
questions of law may be raised. (Philippine Amusement and
 August 9, 2017. G.R. No. 192725.*
CE CONSTRUCTION CORPORATION,
petitioner, vs. ARANETA CENTER, INC., respondent.
Construction Industry Arbitration Commission; The
Construction Industry Arbitration Commission (CIAC) was
a creation of Executive Order (EO) No. 1008, otherwise
known as the Construction Industry Arbitration Law.—The
Construction Industry Arbitration Commission was a
creation of Executive Order No. 1008, otherwise known as
the Construction Industry Arbitration Law. At inception, it
was under the administrative supervision of the Philippine
Domestic Construction Board which, in turn, was an
implementing agency of the Construction Industry
Authority of the Philippines (CIAP). The CIAP is presently
attached to the Department of Trade and Industry.
Same; Construction Disputes; Alternative Dispute
Resolution; Alternative Dispute Resolution Act of 2004;
Arbitration of construction disputes through the
Construction Industry Arbitration Commission (CIAC) was
formally incorporated into the general statutory framework
on alternative dispute resolution through Republic Act No.
9285, the Alternative Dispute Resolution Act of 2004 (ADR
Law).—Republic Act No. 9184 or the Government
Procurement Reform Act, enacted on January 10, 2003,
explicitly recognized and confirmed the competence of the
CIAC: Section 59. Arbitration.—Any and all disputes
arising from the implementation of a contract covered by
this Act shall be submitted to arbitration in the Philippines
according to the provisions of Republic Act No. 876,
otherwise known as the “Arbitration Law”: Provided,
however, That,disputes that are within the competence of the
Construction Industry Arbitration Commission to resolve
shall be referred thereto. The process of arbitration shall be
incorporated as a provision in the contract that will be
executed pursuant to the provisions of this Act: Provided,
That by mutual agreement, the parties may agree in
writing to resort to alternative modes of dispute resolution.
Arbitration of construction disputes through the CIAC was
formally incorporated into the general statu-
_______________
* SECOND DIVISION.
182
182 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
tory framework on alternative dispute resolution
through Republic Act No. 9285, the Alternative Dispute
Resolution Act of 2004 (ADR Law). Chapter 6, Section 34 of
ADR Law made specific reference to the Construction
Industry Arbitration Law, while Section 35 confirmed the
CIAC’s jurisdiction.
Same; Construction; Words and Phrases; The
Construction Industry Arbitration Commission (CIAC) has
the state’s confidence concerning the entire technical expanse
of construction, defined in jurisprudence as “referring to all
on-site works on buildings or altering structures, from land
clearance through completion including excavation, erection
and assembly and installation of components and
equipment.”—The CIAC does not only serve the interest of
speedy dispute resolution, it also
facilitates authoritativedispute resolution. Its authority
proceeds not only from juridical legitimacy but equally from
technical expertise. The creation of a special adjudicatory
body for construction disputes presupposes distinctive and
nuanced competence on matters that are conceded to be
outside the innate expertise of regular courts and
adjudicatory bodies concerned with other specialized fields.
The CIAC has the state’s confidence concerning the entire
technical expanse of construction, defined in jurisprudence
as “referring to all on-site works on buildings or altering
structures, from land clearance through completion
including excavation, erection and assembly and
installation of components and equipment.”
Same; The most recent jurisprudence maintains that
the Construction Industry Arbitration Commission (CIAC)
is a quasi-judicial body.—The most recent jurisprudence
maintains that the CIAC is a quasi-judicial body. This
Court’s November 23, 2016 Decision in Fruehauf
Electronics v. Technology Electronics Assembly and
Management Pacific, 810 SCRA 280, distinguished
construction arbitration, as well as voluntary arbitration
pursuant to Article 219(14) of the Labor Code, from
commercial arbitration. It ruled that commercial arbitral
tribunals are not quasi-judicial agencies, as they are
purely ad hoc bodies operating through contractual consent
and as they intend to serve private, proprietary interests.
In contrast, voluntary arbitration under the Labor Code
and construction arbitration operate through the statutorily
vested jurisdiction of government instrumentalities that
exist independently of the will of contracting parties and to
which these parties submit.
183
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CE Construction Corporation vs. Araneta Center,
Inc.
Same; Appeals; Petitions for Review; Rule 43, Section 1
explicitly lists Construction Industry Arbitration
Commission (CIAC) as among the quasi-judicial agencies
covered by Rule 43. Section 3 indicates that appeals through
Petitions for Review under Rule 43 are to “be taken to the
Court of Appeals (CA) . . . whether the appeal involves
questions of fact, of law, or mixed questions of fact and
law.”—Rule 43 of the 1997 Rules of Civil Procedure
standardizes appeals from quasi-judicial agencies. Rule 43,
Section 1 explicitly lists CIAC as among the quasi-judicial
agencies covered by Rule 43. Section 3 indicates that
appeals through Petitions for Review under Rule 43 are to
“be taken to the Court of Appeals . . . whether the appeal
involves questions of fact, of law, or mixed questions of fact
and law.”
Same; Same; Arbitral Tribunals; The Supreme Court’s
(SC’s) primordial inclination must be to uphold the factual
findings of arbitral tribunals.—Consistent with this
restrictive approach, this Court is duty-bound to be
extremely watchful and to ensure that an appeal does not
become an ingenious means for undermining the integrity
of arbitration or for conveniently setting aside the
conclusions arbitral processes make. An appeal is not an
artifice for the parties to undermine the process they
voluntarily elected to engage in. To prevent this Court from
being a party to such perversion, this Court’s primordial
inclination must be to uphold the factual findings of
arbitral tribunals.
Arbitral Tribunals; Common sense dictates that by the
parties’ voluntary submission, they acknowledge that an
arbitral tribunal constituted under the Construction
Industry Arbitration Commission (CIAC) has full
competence to rule on the dispute presented to it.—ACI and
CECON voluntarilysubmitted themselves to the CIAC
Arbitral Tribunal’s jurisdiction. The contending parties’
own volition is at the inception of every construction
arbitration proceeding. Common sense dictates that by the
parties’ voluntary submission, they acknowledge that an
arbitral tribunal constituted under the CIAC has full
competence to rule on the dispute presented to it. They
concede this not only with respect to the literal issues
recited in their terms of reference, as ACI suggests, but also
with respect to their necessary incidents. Accordingly, in
delineating the authority of arbitrators, the CIAC Rules of
Procedure speak not only of the literally recited issues but
also of “related matters”: SECTION 21.3.
184
184 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
Extent of power of arbitrator.—The Arbitral Tribunal
shall decide only such issues and related matters as are
submitted to them for adjudication. They have no power to
add, to subtract from, modify, or amend any of the terms of
the contract or any supplementary agreement thereto, or
any rule, regulation or policy promulgated by the CIAC. To
otherwise be puritanical about cognizable issues would be
to cripple CIAC arbitral tribunals. It would potentially be to
condone the parties’ efforts at tying the hands of tribunals
through circuitous, trivial recitals that fail to address the
complete extent of their claims and which are ultimately
ineffectual in dispensing an exhaustive and dependable
resolution. Construction arbitration is not a game of guile
which may be left to ingenious textual or technical
acrobatics, but an endeavor to ascertain the truth and to
dispense justice “by every and all reasonable means without
regard to technicalities of law or procedure.”
Construction Contracts; Jurisprudence has settled that
even in cases where parties enter into contracts which do not
strictly conform to standard formalities or to the typifying
provisions of nominate contracts, when one renders services
to another, the latter must compensate the former for the
reasonable value of the services rendered.—Jurisprudence
has settled that even in cases where parties enter into
contracts which do not strictly conform to standard
formalities or to the typifying provisions of nominate
contracts, when one renders services to another, the latter
must compensate the former for the reasonable value of the
services rendered. This amount shall be fixed by a court.
This is a matter so basic, this Court has once characterized
it as one that “springs from the fountain of good
conscience”: As early as 1903, in Perez v. Pomar, this Court
ruled that where one has rendered services to another, and
these services are accepted by the latter, in the absence of
proof that the service was rendered gratuitously, it is but
just that he should pay a reasonable remuneration
therefore because “it is a well known principle of law, that
no one should be permitted to enrich himself to the damage
of another.” Similary in 1914, this Court declared that in
this jurisdiction, even in the absence of statute, “. . . under
the general principle that one person may not enrich
himself at the expense of another, a judgment creditor
would not be permitted to retain the purchase price of land
sold as the property of the judgment debtor after it has been
made to appear that the judgment debtor had no title to the
land and that the purchaser had failed to secure title
thereto . . .” The foregoing
 184
184 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
equitable principle which springs from the fountain of
good conscience are applicable to the case at bar. Consistent
with the Construction Industry Arbitration Law’s declared
policy, the CIAC Arbitral Tribunal was specifically charged
with “ascertain[ing] the facts in each case by every and all
reasonable means.” In discharging its task, it was
permitted to even transcend technical rules on admissibility
of evidence.
Same; Article 1724 demands two (2) requisites in order
that a price may become immutable: first, there must be an
actual, stipulated price; and second, plans and
specifications must have definitely been agreed upon.—
Article 1724 demands two (2) requisites in order that a
price may become immutable: first, there must be an actual,
stipulated price; and second, plans and specifications must
have definitely been agreed upon. Neither requisite avails
in this case. Yet again, ACI is begging the question. It is
precisely the crux of the controversy that no price has been
set. Article 1724 does not work to entrench a disputed price
and make it sacrosanct. Moreover, it was ACI which thrust
itself upon a situation where no plans and specifications
were immediately agreed upon and from which no deviation
could be made. It was ACI, not CECON, which made,
revised, and deviated from designs and specifications.
PETITION for review on certiorari of the decision and
amended decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Tan, Acut, Lopez & Pison for petitioner.
Angara, Abello, Concepcion, Regala & Cruzfor Araneta
Center, Inc.
LEONEN,J.:
A tribunal confronted not only with ambiguous
contractual terms but also with the total absence of an
instrument which definitively articulates the contracting
parties’ agreement does not act in excess of jurisdiction
when it employs aids in interpretation, such as those
articulated in Articles 1370 to
186
186 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
1379 of the Civil Code. In so doing, a tribunal does not
conjure its own contractual terms and force them upon the
parties.
In addressing an iniquitous predicament of a contractor
that actually renders services but remains inadequately
compensated, arbitral tribunals of the Construction
Industry Arbitration Commission (CIAC) enjoy a wide
latitude consistent with their technical expertise and the
arbitral process’ inherent inclination to afford the most
exhaustive means for dispute resolution. When their
awards become the subject of judicial review, courts must
defer to the factual findings borne by arbitral tribunals’
technical expertise and irreplaceable experience of
presiding over the arbitral process. Exceptions may be
availing but only in instances when the integrity of the
arbitral tribunal itself has been put in jeopardy. These
grounds are more exceptional than those which are
regularly sanctioned in Rule 45 petitions.
This resolves a Petition for Review on Certiorari1under
Rule 45 of the 1997 Rules of Civil Procedure, praying that
the assailed April 28, 2008 Decision2 and July 1, 2010
Amended Decision3 of the Court of Appeals in C.A.-G.R.
S.P. No. 96834 be reversed and set aside. It likewise prays
that the October 25, 2006 Decision4 of the CIAC Arbitral
Tribunal be reinstated.
_______________
1 Rollo, pp. 153-268.
2 Id., at pp. 11-85. The Decision was penned by
Associate Justice Agustin S. Dizon, and concurred in by
Associate Justices Regalado E. Maambong and Celia C.
Librea-Leagogo of the Sixteenth Division, Court of Appeals,
Manila.
3 Id., at pp. 87-137. The Amended Decision was penned
by Presiding Justice Andres B. Reyes, Jr., and concurred in
by Associate Justices Hakim S. Abdulwahid, Francisco P.
Acosta, and Michael P. Elbinias, and dissented in by
Associate Justice Sesinando E. Villon of the Former Special
Sixteenth Division of Five, Court of Appeals, Manila.
4 Id., at pp. 3762-4029. The Arbitral Tribunal is
composed of Ernesto S. De Castro as Chairman and James
S. Villafranca and Reynaldo T. Viray as members.
187
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CE Construction Corporation vs. Araneta Center,
Inc.
The CIAC Arbitral Tribunal’s October 25, 2006 Decision
awarded a total sum of P217,428,155.75 in favor of
petitioner CE Construction Corporation (CECON). This
sum represented adjustments in unit costs plus interest,
variance in takeout costs, change orders, time extensions,
attendance fees, contractor-supplied equipment, and costs
of arbitration. This amount was net of the countervailing
awards in favor of respondent Araneta Center, Inc. (ACI),
for defective and incomplete works, permits, licenses and
other advances.5
The assailed Court of Appeals’ April 28, 2008 Decision
modified the CIAC Arbitral Tribunal’s October 25, 2006
Decision by awarding a net amount of P82,758,358.80 in
favor of CECON.6 The Court of Appeals’ July 1, 2010
Amended Decision adjusted this amount to
P93,896,335.71.7
Petitioner CECON was a construction contractor, which,
for more than 25 years, had been doing business with
respondent ACI, the developer of Araneta Center, Cubao,
Quezon City.8
In June 2002, ACI sent invitations to different
construction companies, including CECON, for them to bid
on a project identified as “Package #4
Structure/Mechanical, Electrical, and Plumbing/Finishes
(excluding Part A Substructure),” a part of its
redevelopment plan for Araneta Center Complex.9The
project would eventually be the Gateway Mall. As described
by ACI, “[t]he Project involved the design, coordination,
construction and completion of all architectural and
structural portions of Part B of the Works[;] and the
construction of the architectural and structural portions of
Part A of
_______________
5 Id., at pp. 4028-4029.
6 Id., at pp. 84-85.
7 Id., at pp. 136-137.
 8 Id., at p. 6221, CECON’s Memorandum; and id., at p. Rates, and with regard to the Value Engineering
6372, ACI’s Memorandum. Proposals under Clause 27. The Contract Sum shall not
9 Id., at p. 12. be adjusted for changes in the cost of labour, materials
or other matters.12

_______________
188
188 SUPREME COURT REPORTS 10 Id., at p. 6373, ACI’s Memorandum.
ANNOTATED 11 Id.
12 Id., at p. 6374, Conditions of Contract, Clause 6.0.
CE Construction Corporation vs. Araneta Center,
Reproduced in ACI’s Memorandum.
Inc.
the Works known as Package 4 of the Araneta Center
Redevelopment Project.”10
As part of its invitation to prospective contractors, ACI 189
furnished bidders with Tender Documents, consisting of: VOL. 836, AUGUST 9, 2017 189
Tender Invitation, Project Description, Instructions to CE Construction Corporation vs. Araneta Center,
Tenderers, Form of Tender, Dayworks, Preliminaries and
Inc.
General Requirements, and Conditions of Contract; I:
TENDER AND CONTRACT
Volume
Fixed Price Contract
Technical Specifications for the Architectural,
1. The Contract Sum payable to the Contactor is a Lump
Structural, Mechanical, Plumbing, Fire Protection and
Electrical Works; and II: Volume Sum Fixed Price and will not be subject to adjustment,
save only where expressly provided for within the
Addenda Nos. 1, 2, 3, and 4 relating to modifications to
Contract Documents and the Form of Agreement.
portions of the Tender Documents.11
2. The Contract Sum shall not be subject to any adjustment
The Tender Documents described the project’s contract
“in respect of rise and fall in the cost of materials[,]
sum to be a “lump sum” or “lump sum fixed price” and
restricted cost adjustments, as follows: labor, plant, equipment, exchange rates or any other
matters affecting the cost of execution of Contract, save
TYPE OF CONTRACT 6
only where expressly provided for within the Contract
6.1. This is a Lump Sum Contract and the price is a fixed
Documents or the Form of Agreement.
price not subject to measurement or recalculation should
3. The Contract Sum shall further not be subject to any
the actual quantities of work and materials differ from
change in subsequent legislation, which causes
any estimate available at the time of contracting, except
additional or reduced costs to the Contractor.13
in regard to Cost-Bearing Changes which may be
ordered by the Owner which shall be valued under the
terms of the Contract in accordance with the Schedule of
 The bidders’ proposals for the project were submitted on
August 30, 2002. These were based on “design and
construct” bidding.14
CECON submitted its bid, indicating a tender amount of
P1,449,089,174.00. This amount was inclusive of “both the
act of designing the building and executing its
construction.” Its bid and tender were based on schematic
drawings, i.e., conceptual designs and suppositions culled
from ACI’s Tender Documents. CECON’s proposal
“specifically stated that its bid was valid for only ninety (90)
days, or only until 29 November 2002.” This tender
proposed a total of 400 days, or until January 10, 2004, for
the implementation and completion of the project.15
_______________
13 Id. Preliminaries and General Requirements, Section
4.0. Reproduced in ACI’s Memorandum.
14 Id., at p. 3773.
15 Id., at p. 6222, CECON’s Memorandum.
190
190 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
CECON offered the lowest tender amount. However,
ACI did not award the project to any bidder, even as the
validity of CECON’s proposal lapsed on November 29, 2002.
ACI only subsequently informed CECON that the contract
was being awarded to it. ACI elected to inform CECON
verbally and not in writing.16
In a phone call on December 7, 2002, ACI instructed
CECON to proceed with excavation works on the project.
ACI, however, was unable to deliver to CECON the entire
project site. Only half, identified as the Malvar-to-Roxas
portion, was immediately available. The other half,
identified as the Roxas to-Coliseum portion, was delivered
only about five (5) months later.17
As the details of the project had yet to be finalized, ACI
and CECON pursued further negotiations. ACI and
CECON subsequently agreed to include in the project the
construction of an office tower atop the portion identified as
Part A of the project. This escalated CECON’s project cost
to P1,582,810,525.00.18
After further negotiations, the project cost was again
adjusted to P1,613,615,244.00. Still later, CECON extended
to ACI a P73,615,244.00 discount, thereby reducing its
offered project cost to P1,540,000,000.00.19
Despite these developments, ACI still failed to formally
award the project to CECON. The parties had yet to execute
a formal contract. This prompted CECON to write a letter
to ACI, dated December 27, 2002,20emphasizing that the
project cost quoted to ACI was “based upon the prices
prevailing at December 26, 2002” price levels.21
_______________
16 Id., at p. 6223, CECON’s Memorandum.
17 Id.
18 Id.
19 Id., at p. 6224, CECON’s Memorandum.
20 Id., at pp. 549-553, Annex D to CECON’s Petition.
21 Id., at p. 549.
191
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CE Construction Corporation vs. Araneta Center,
 Inc.
By January 2003 and with the project yet to be formally
awarded, the prices of steel products had increased by 5%
and of cement by P5.00 per bag. On January 8, 2003,
CECON again wrote ACI notifying it of these increasing
costs and specifically stating that further delays may affect
the contract sum.22
Still without a formal award, CECON again wrote to
ACI on January 21, 200323 indicating cost and time
adjustments to its original proposal. Specifically, it referred
to an 11.52% increase for the cost of steel products, totalling
P24,921,418.00 for the project; a P5.00 increase per bag of
cement, totalling P3,698,540.00 for the project; and costs
incurred because of changes to the project’s structural
framing, totalling P26,011,460.00. The contract sum,
therefore, needed to be increased to P1,594,631,418.00.
CECON also specifically stated that its tender relating to
these adjusted prices were valid only until January 31,
2003, as further price changes may be forthcoming. CECON
emphasized that its steel supplier had actually already
advised it of a forthcoming 10% increase in steel prices by
the first week of February 2003. CECON further impressed
upon ACI the need to adjust the 400 days allotted for the
completion of the project.24
On February 4, 2003, ACI delivered to CECON the
initial tranche of its down payment for the project. By then,
prices of steel had been noted to have increased by 24%
from December 2002 prices. This increase was validated by
ACI.25
Subsequently, ACI informed CECON that it was taking
upon itself the design component of the project, removing
from CECON’s scope of work the task of coming up with
designs.26
_______________
22 Id., at pp. 554-555, Annex E to CECON’s Petition.
23 Id., at pp. 556-557, Annex F to CECON’s Petition.
24 Id., at p. 556.
25 Id., at pp. 3786 and 6225.
26 Id., at p. 6225.
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192 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
On June 2, 2003, ACI finally wrote a letter27 to CECON
indicating its acceptance of CECON’s August 30, 2002
tender for an adjusted contract sum of P1,540,000.00 only:
Araneta Center, Inc. (ACI) hereby accepts the C-E
Construction Corporation (CEC) tender dated August 30,
2002, submitted to ACI in the adjusted sum of One Billion
Five Hundred Forty Million Pesos Only
(P1,540,000,000.00), which sum includes all additionally
quoted and accepted items within this acceptance letter and
attachments, Appendix A, consisting of one (1) page, and
Appendix B, consisting of seven (7) pages plus attachments,
which sum of One Billion Five Hundred Forty Million Pesos
Only (P1,540,000,000.00) is inclusive of any Government
Customs Duty and Taxes including Value Added Tax (VAT)
and Expanded Value-Added Tax (EVAD), and which sum is
hereinafter referred to as the Contract Sum.28
Item 4, Appendix B of this acceptance letter explicitly
recognized that “all design except support to excavation
sites, is now by ACI.”29 It thereby confirmed that the parties
were not bound by a design-and-construct agreement, as
initially contemplated in ACI’s June 2002 invitation, but by
a construct-only agreement. The letter stated that
“[CECON] acknowledge[s] that a binding contract is now
existing.”30 However, consistent with ACI’s admitted
changes, it also expressed ACI’s corresponding undertaking:
“This notwithstanding, formal contract documents
embodying these positions will shortly be prepared and
forwarded to you for execution.”31
_______________
27 Id., at pp. 558-560, Annex G of CECON’s Petition.
28 Id., at p. 558.
29 Id., at p. 641.
30 Id., at p. 560, Annex G to CECON’s Petition.
31 Id.
193
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CE Construction Corporation vs. Araneta Center,
Inc.
Despite ACI’s undertaking, no formal contract
documents were delivered to CECON or otherwise executed
between ACI and CECON.32
As it assumed the design aspect of the project, ACI
issued to CECON the construction drawings for the project.
Unlike schematics, these drawings specified “the kind of
work to be done and the kind of material to be
used.”33CECON laments, however, that “ACI issued the
construction drawings in piece-meal fashion at times of its
own choosing.”34 From the commencement of CECON’s
engagement until its turnover of the project to ACI, ACI
issued some 1,675 construction drawings. CECON
emphasized that many of these drawings were partial and
frequently pertained to revisions of prior items of work.35 Of
these drawings, more than 600 were issued by ACI well
after the intended completion date of January 10, 2004:
Drawing No. 1040 was issued on January 12, 2004, and the
latest, Drawing No. 1675, was issued on November 26,
2004.36
Apart from shifting its arrangement with CECON from
design-and-construct to construct-only, ACI introduced
other changes to its arrangements with CECON. CECON
underscored two (2) of the most notable of these changes
which impelled it to seek legal relief.
First, on January 30, 2003, ACI issued Change Order
No. 11,37 which shifted the portion identified as Part B of
the project from reinforced concrete framing to structural
steel framing. Deleting the cost for reinforced concrete
framing meant removing P380,560,300.00 from the contract
sum. Nevertheless, replacing reinforced concrete framing
with structural
_______________
32 Id., at p. 6227, CECON’s Memorandum.
33 Id.
34 Id.
35 Id.
36 Id., at p. 6228, CECON’s Memorandum.
37 Id., at pp. 663-669, Annex H to CECON’s Petition;
and, p. 6228, CECON’s Memorandum.
194
194 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
steel framing “entailed substitute cost of P217,585,000, an
additional P44,281,100 for the additional steel frames due
to revisions, and another P1,950,000 for the additional
pylon.”38
Second, instead of leaving it to CECON, ACI opted to
purchase on its own certain pieces of equipment —
elevators, escalators, chillers, generator sets, indoor
substations, cooling towers, pumps, and tanks — which
were to be installed in the project. This entailed “takeout
costs”; that is, the value of these pieces of equipment
needed to be removed from the total amount due to
CECON. ACI considered a sum totalling P251,443,749.00 to
have been removed from the contract sum due to CECON.
This amount of P251,443,749.00 was broken down, as
follows:
For Elevators/escalators, P106,000,000; (a)
For Chillers, P41,152,900; (b)
For Generator Sets, P53,040,000; (c)
For Indoor Substation, P23,024,150; (d)
For Cooling Towers, P5,472,809; and (e)
For Pumps and Tanks, P22,753,890. (f) 39
CECON avers that in removing the sum of
P251,443,749.00, ACI “simply deleted the amount in the
cost breakdown corresponding to each of the items taken
out in the contract documents.”40 ACI thereby disregarded
that the corresponding stipulated costs pertained not only
to the acquisition cost of these pieces of equipment but also
to so-called “builder’s works” and other costs relating to
their preparation for and installation in the project. Finding
it unjust to be performing auxiliary services practically for
free, CECON proposed a reduction in the takeout costs
claimed by ACI. It instead
_______________
38 Id., at p. 6229, CECON’s Memorandum.
39 Id.
40 Id.
195
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CE Construction Corporation vs. Araneta Center,
Inc.
claimed P26,892,019.00 by way of compensation for the
work that it rendered.41
With many changes to the project and ACI’s delays in
delivering drawings and specifications, CECON
increasingly found itself unable to complete the project on
January 10, 2004. It noted that it had to file a total of 15
Requests for Time Extension from June 10, 2003 to
December 15, 2003, all of which ACI failed to timely act
on.42
Exasperated, CECON served notice upon ACI that it
would avail of arbitration. On January 29, 2004, it filed
with the CIAC its Request for Adjudication.43 It prayed that
a total sum of P183,910,176.92 representing adjusted
project costs be awarded in its favor.44
On March 31, 2004, CECON and ACI filed before the
CIAC a Joint Manifestation45 indicating that some issues
between them had already been settled. Proceedings before
the CIAC were then suspended to enable CECON and ACI
to arrive at an amicable settlement.46 On October 14, 2004,
ACI filed a motion before the CIAC noting that it has
validated P85,000,000.00 of the total amount claimed by
CECON. It prayed for more time to arrive at a settlement.47
In the meantime, CECON completed the project and
turned over Gateway Mall to ACI.48 It had its blessing on
November 26, 2004.49
_______________ was to be composed of Dr. Ernesto S. De Castro, who acted
as Chairperson with Engr. Reynaldo T. Viray and Atty.
41 Id., at p. 6230, CECON’s Memorandum. James S. Villafranca as members.54
42 Id. ACI filed a Motion for Reconsideration of the CIAC’s
43 Id., at pp. 670-673, Annex I to CECON’s Petition. March 16, 2005 Order. This was denied in the Order dated
44 Id., at p. 673. March 30, 2005.55
45 Id., at p. 3763. In the Order dated April 1, 2005, the CIAC Arbitral
46 Id., at p. 6231, CECON’s Memorandum. Tribunal set the preliminary conference on April 13, 2005.56
47 Id., at p. 3764. At the preliminary conference, CECON indicated that,
48 Id., at p. 6231. the total sum it was entitled to recover from ACI needed to
49 Id., at p. 3764. be adjusted to P324,113,410.08. The CIAC Arbitral
Tribunal,
_______________

196 50 Id., at p. 3765.

196 SUPREME COURT REPORTS 51 Id.
ANNOTATED 52 Id.
CE Construction Corporation vs. Araneta Center, 53 Id., at p. 3765, CECON’s Memorandum
Inc. 54 Id., at pp. 3765 and 4029.
As negotiations seemed futile, on December 29, 2004, 55 Id., at p. 3766, CECON’s Memorandum.
CECON filed with the CIAC a Motion to Proceed with 56 Id.
arbitration proceedings. ACI filed an Opposition.50
After its Opposition was denied, ACI filed its Answer
dated January 26, 2005.51 It attributed liability for delays to
197
CECON and sought to recover counterclaims totalling
VOL. 836, AUGUST 9, 2017 197
P180,752, 297.84. This amount covered liquidated damages
for CECON’s supposed delays, the cost of defective works CE Construction Corporation vs. Araneta Center,
which had to be rectified, the cost of procuring permits and Inc.
licenses, and ACI’s other advances.52 thus, directed CECON to file an Amended Request for
On February 8, 2005, ACI filed a Manifestation and Adjudication/Amended Complaint.57
Motion seeking the CIAC’s clearance for the parties to enter Following the filing of CECON’s Amended Request for
into mediation. Mediation was then instituted with Atty. Adjudication/Amended Complaint and the ensuing
Sedfrey Ordoñez acting as mediator.53 responsive pleadings, another preliminary conference was
After mediation failed, an arbitral tribunal was set on May 13, 2005. The initial hearing of the case was
constituted through a March 16, 2005 Order of the CIAC. It then set on June 10, 2005.58
 At the initial hearing, the CIAC Arbitral Tribunal
resolved to exclude the amount of P20,483,505.12 from
CECON’s claims as these pertained to unpaid
accomplishments that did not relate to the issue of cost
adjustments attributed to ACI, as originally pleaded by
CECON.59
Following the conduct of hearings, the submission of the
parties’ memoranda and offers of exhibits, the CIAC
Arbitral Tribunal rendered its Decision on October 25,
2006. It awarded a total of P229,223,318.69 to CECON,
inclusive of the costs of arbitration. It completely denied
ACI’s claims for liquidated damages, but awarded to ACI a
total of P11,795,162.93 on account of defective and
rectification works, as well as permits, licenses, and other
advances.60 Thus, the net amount due to CECON was
determined to be P217,428,155.75.
The CIAC Arbitral Tribunal noted that while ACI’s
initial invitation to bidders was for a lump sum design-and-
construct arrangement, the way that events actually
unfolded clearly indicated a shift to an arrangement where
the designs were contingent upon ACI itself. Considering
that the premise for CECON’s August 30, 2002 lump sum
offer of P1,540,000.00 was no longer availing, CECON was
no longer bound by its representations in respect of that
lump sum amount. It may then claim cost adjustments
totalling P16,429,630.74, as well
_______________
57 Id.
58 Id., at pp. 3767-3769.
59 Id., at pp. 3768-3769.
60 Id., at pp. 4028-4029.
198
198 SUPREME COURT REPORTS
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CE Construction Corporation vs. Araneta Center,
Inc.
as values accruing to the various change orders issued by
ACI, totalling P159,827,046.94.61
The CIAC Arbitral Tribunal found ACI liable for the
delays. This entitled CECON to extended overhead costs
and the ensuing extension cost of its Contractor’s All Risk
Insurance. For these costs, the CIAC Arbitral Tribunal
awarded CECON the total amount of P16,289,623.08. As it
was ACI that was liable for the delays, the CIAC Arbitral
Tribunal ruled that ACI was not entitled to liquidated
damages.62
The CIAC Arbitral Tribunal ruled that CECON was
entitled to a differential in take out costs representing
builder’s works and related costs with respect to the
equipment purchased by ACI. This differential cost was in
the amount of P15,332,091.47.63The CIAC Arbitral Tribunal
further noted that while ACI initially opted to purchase by
itself pumps, tanks, and cooling towers and removed these
from CECON’s scope of work, it subsequently elected to still
obtain these through CECON. Considering that the
corresponding amount deducted as takeout costs did not
encompass the overhead costs and profits under day work,
which should have accrued to CECON because of these
equipment, the CIAC Arbitral Tribunal ruled that CECON
was entitled to 18% day work rate or a total of
P21,267,908.00.64
The CIAC Arbitral Tribunal also found that, apart from
adjusted costs incurred on account of ACI’s own activities, it
also became necessary for CECON, as main contractor, to
continue extending auxiliary services to the project’s
subcontractors because of the delays. Thus, the CIAC The dispositive portion of the CIAC Arbitral Tribunal’s
Arbitral Tribunal awarded CECON attendance fees — the Decision read:
main contractor’s markup for auxiliary services extended to WHEREFORE, Respondent is hereby ordered to pay the
subcontractors — totalling P14,335,674.88. This amount Claimant the amount of PESOS TWO HUNDRED
was lower than the SEVENTEEN MILLION, FOUR HUNDRED TWENTY-
_______________ EIGHT THOUSAND, ONE HUNDRED FIFTY[-]FIVE
PESOS AND SEVENTY[-]FIVE CENTAVOS
61 Id., at pp. 3811-3813 and 3882-3888. (Php217,428,155.75) within thirty (30) days upon
62 Id., at pp. 3940-3943. promulgation of the award. Interest 6% per annum shall be
63 Id., at pp. 3832-3833. imposed on the award for any balance remaining from the
64 Id., at pp. 3954-3955. promulgation of the award up to the time the award
becomes final and executory. Thereafter, interest of 12% per
annum shall be imposed on any balance of the award until
fully paid.
199
VOL. 836, AUGUST 9, 2017 199 _______________
CE Construction Corporation vs. Araneta Center,
Inc. 65 Id., at p. 3768.
66 Id., at pp. 3980-3990.
original amount prayed for by CECON (i.e.,
67 Id., at pp. 4027-4028.
P19,544,667.81)65 as the CIAC Arbitral Tribunal ruled that
68 Id., at pp. 3997-3998.
CECON may not claim attendance fees pertaining to
69 Id., at pp. 4012-4014.
subcontractors which directly dealt with ACI.66
Considering that CECON’s predicament was borne by
ACI’s fault, the CIAC Arbitral Tribunal saw it fit to award
to CECON the costs of arbitration totalling P1,083,802.58.67 200
While mainly ruling in CECON’s favor, the CIAC 200 SUPREME COURT REPORTS
Arbitral Tribunal found CECON liable for discolored and
ANNOTATED
mismatched tiles. It noted that CECON had engaged the
services of a subcontractor for the installation of tiles, for CE Construction Corporation vs. Araneta Center,
which it claimed attendance fees. Thus, it awarded Inc.
P7,980,000.00 to ACI.68 In addition, it found CECON liable SO ORDERED.70
to ACI for amounts paid in advance for permits and licenses
for the additional office tower, electrical consumption, and
garbage collection. Thus, it awarded another P3,815,162.93
to ACI.69
 On December 4, 2006, ACI filed before the Court of
Appeals a Petition for Review71 under Rule 43 of the 1997
Rules of Civil Procedure.
In the meantime, on December 28, 2006, the CIAC
Arbitral Tribunal issued an Order72acknowledging
arithmetical errors in its October 25, 2006 Decision. Thus,
it modified its October 25, 2006 Decision, indicating that
the net amount due to CECON was P231,357,136.72, rather
than P217,428,155.75.73
In its assailed April 28, 2008 Decision,74 the Court of
Appeals reduced the award in favor of CECON to
P114,324,605.00 and increased the award to ACI to
P31,566,246.20.75
The Court of Appeals held as inviolable the lump sum
fixed price arrangement between ACI and CECON. It
faulted the CIAC Arbitral Tribunal for acting in excess of
jurisdiction as it supposedly took it upon itself to
unilaterally modify the arrangement between ACI and
CECON.76
Thus, the Court of Appeals deleted the CIAC Arbitral
Tribunal’s award representing cost adjustments. However,
the Court of Appeals also noted that in ACI’s and CECON’s
March 30, 2004 Joint Manifestation before CIAC, ACI
conceded that P10,266,628.00 worth of cost adjustments
was due to CECON and undertook to pay CECON that
amount. The Court of Appeals, hence, maintained a
P10,266,628.00 award of cost adjustment in favor of
CECON.77
_______________
70 Id., at p. 4029.
71 Id., at pp. 4030-4881.
72 Id., at pp. 4882-4887.
73 Id., at p. 4886.
74 Id., at pp. 11-85.
75 Id., at p. 85.
76 Id., at pp. 32-34.
77 Id., at pp. 84-85.
201
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CE Construction Corporation vs. Araneta Center,
Inc.
On the cost increases borne by Change Order No. 11 —
the shift from reinforced concrete to structural steel
framing — and by transitions from schematic diagrams to
construction drawings, the Court of Appeals dismissed the
CIAC Arbitral Tribunals award to CECON as arising from
“pity” and unwarranted by the lump sum, fixed price
arrangement.78
The Court of Appeals held ACI liable to CECON for the
sum of P12,672,488.36 for miscellaneous change orders,
which it construed to be “separate contracts that have been
entered into at the time [ACI] required them.”79 It likewise
held ACI liable for P1,132,946.17 representing the balance
of 12 other partially paid change orders.80
The Court of Appeals noted that CECON was not
entitled to time extensions because the arrangement
between ACI and CECON had never been altered.
Consequently, it was not entitled to acceleration costs,
additional overhead, and reimbursement for extending the
Contractor’s All Risk Insurance.81Conversely, the Court of
Appeals held CECON liable for delays thereby entitling
ACI to liquidated damages corresponding to 10% of the
supposed contract sum of P1,540,000,000.00, or
P15,400,000.00.82
Also on account of the supposed lump sum arrangement,
the Court of Appeals held that CECON was not entitled to
attendance fees on contract amounts increased by change to P3,811,289.70, the Court of Appeals concluded that an
order works.83 It also stated that the rate for attendance award for takeout costs in that amount was proper.86
fees, overhead, and profit for subcontractors’ works On the CIAC Arbitral Tribunal’s award for overhead
remained subject to the original contract documents based costs and profits under day work, the Court of Appeals held
on ACI’s original invitation to bidders and had never been that it was improper to grant this award based on
altered.84 stipulations on day works pertaining “only to ‘materials’
_______________ and not to equipment.”87
Finally, the Court of Appeals held that CECON was not
78 Id., at p. 50. entitled to costs of litigation considering that “no premium
79 Id. is to be placed on the right to litigate”88 and since ACI could
80 Id., at p. 52. not be faulted for delays.
81 Id., at pp. 54-56. The dispositive portion of the assailed Court of Appeals’
82 Id., at pp. 56-59. April 28, 2008 Decision read:
83 Id., at pp. 72-73. WHEREFORE, based on all the foregoing, the Decision
84 Id., at pp. 70-72. of the Arbitral Tribunal is modified as follows:
AWARD TO CECON a.

202 _______________
202 SUPREME COURT REPORTS
ANNOTATED 85 Id., at p. 69.
CE Construction Corporation vs. Araneta Center, 86 Id., at pp. 42-45.
87 Id., at pp. 62-63.
Inc.
88 Id., at p. 83.
Regarding attendance fees, the Court of Appeals
proffered that the work attributed to subcontractors was
merely work done by CECON itself, thereby negating the
need for attendance fees.85 203
Concerning takeout costs, the Court of Appeals stated VOL. 836, AUGUST 9, 2017 203
that CECON was in no position to propose its own takeout
CE Construction Corporation vs. Araneta Center,
costs as the tender documents issued along with ACI’s
Inc.
invitation to bidders stated that takeout costs must be
based exclusively on the rates provided in the Contract Cost AWARD TO ARANETA b.
Breakdown. Nevertheless, as ACI had previously
NO. ISSUE Pesos (PHP)
undertaken to pay the variance in takeout costs amounting
[5] Liquidated Damages 15,400,000.00
NO. ISSUE Pesos (PHP) The dispositive portion of the assailed Court of Appeals’
Defective and Incomplete July 1, 2010 Amended Decision read:
[6] 3,000,000.00
Works WHEREFORE, Our Decisiondated 28 April 2008 is
Bookmarking Granite Tiles 6,980,000.00 hereby modified as follows:
Permits, Licenses and Other I – AWARD:
[7] 6,186,246.23
Advances AWARD TO CE CONSTRUCTION, INC. a.
31,566,246.20
Total NO. ISSUE PESOS (PhP)
(sic)
In addition, CECON is directed to submit all required 1
Additional costs spent on
10,266,628.00
closeout documents within thirty (30) days from receipt of rebars.
this Decision. Increase in the costs of cement
The parties shall bear their own costs of arbitration and 2 and formworks falling under 5,205,004.02
litigation. cost-bearing change.
SO ORDERED.89 Representing undervaluation of
respondent’s works in the
3 1,209,782.50
_______________ supply and installation of G.I.
sheets.
89 Id., at pp. 84-85. 4
Representing Miscellaneous
27,601,469.32
Change Orders
5 Drilling of Holes 4,543,450.00
[Schematic Drawings] to
6 80,108,761.60
204 [Construction Drawings]
204 SUPREME COURT REPORTS Installation of equipment
[7] 1,127,486.50
ANNOTATED supplied by owner
CE Construction Corporation vs. Araneta Center, TOTAL 130,062,581.94
Inc.
_______________
Acting on CECON’s Motion for Reconsideration, the
Court of Appeals issued its Amended Decision on July 1,
90 Id., at pp. 87-137.
2010.90 This Amended Decision increased the award for
91 Id., at pp. 105-106.
miscellaneous change orders to P27,601,469.32; reinstated
92 Id., at p. 107.
awards for undervalued works in supplying and installing
93 Id., at p. 104.
G.I. sheets worth P1,209,782.5091 and for the drilling of
holes and application of epoxy worth P4,543,456.00;92 and
deleted the award for takeout costs.93
205
 VOL. 836, AUGUST 9, 2017 205 offer to bid. It cites specific provisions of these documents
CE Construction Corporation vs. Araneta Center, such as valuation rules
Inc. _______________
AWARD TO ARANETA CENTER, INC. b.
94 Id., at pp. 136-137.
1 Liquidated Damage (sic) 20,000,000.00 95 Id., at pp. 153-268.
2 Defective and Incomplete Works 3,000,000.00 96 Id., at pp. 263-264.
3 Bookmarking Granite Tiles 6,980,000.00 97 Id., at p. 6098.
Permits, Licenses and other
4 6,186,246.23
Advances
TOTAL 36,166,246.23
206
II – COMPUTATION:
206 SUPREME COURT REPORTS
AWARD TO CE ANNOTATED
130,062,581.94
CONSTRUCTION, INC. CE Construction Corporation vs. Araneta Center,
LESS Inc.
AWARD TO ARANETA CENTER,
36,166,246.23 and required notices for extensions and changes, reckoning
INC. of losses and expenses, the ensuing liquidated damages for
BALANCE PAYABLE BY
93,896,335.71 defects, cost-bearing changes and provisional sums,98which
ARANETA TO CECON define parameters for permissible changes and for
SO ORDERED.94 reckoning corresponding costs and liabilities. However, it
did not attach any of these documents to its Comment or
Memorandum. It also cites statutory provisions — Articles
Aggrieved at the Court of Appeals’ ruling, CECON filed
171599and 1724100 of the Civil Code — on CECON’s
the present Petition insisting on the propriety of the CIAC
liabilities and the primacy of stipulated contract prices.101
Arbitral Tribunal’s conclusions and findings.95 It prays that
By the inviolability of their agreement, ACI insists on
the assailed Court of Appeals’ decisions be reversed and
the supposed immutability of the stipulated contract sum
that the CIAC Arbitral Tribunal’s October 25, 2006
and on the impropriety of the CIAC Arbitral Tribunal in
Decision, as modified by its December 28, 2006 Order, be
writing its own terms for ACI and CECON to follow.102 It
reinstated.96
faults the CIAC
ACI counters that the Court of Appeals’ July 1, 2010
_______________
Amended Decision must be upheld.97
ACI insists on the inviolability of its supposed 98 Id., at pp. 5914-5929 and 5934-5936.
agreement with CECON, as embodied in the contract 99 CIVIL CODE, Art. 1715 provides:
documents delivered to contractors alongside the original
 The contractor shall execute the work in such a manner
that it has the qualities agreed upon and has no defects
which destroy or lessen its value or fitness for its ordinary
or stipulated use. Should the work be not of such quality,
the employer may require that the contractor remove the
defect or execute another work. If the contractor fails or
refuses to comply with this obligation, the employer may
have the defect removed or another work executed, at the
contractor’s cost. 1715. Article
100 CIVIL CODE, Art. 1724 provides:
The contractor who undertakes to build a structure or
any other work for a stipulated price, in conformity with
plans and specifications agreed upon with the landowner,
can neither withdraw from the contract nor demand an
increase in the price on account of the higher cost of labor
or materials, save when there has been a change in the
plans and specifications, provided: 1724. Article
Such change has been authorized by the proprietor in
writing; and (1)
The additional price to be paid to the contractor has
been determined in writing by both parties. (2)
101 Rollo, pp. 5930-5933.
102 Id., at p. 5893. ACI’s Comment states, “the Arbitral
Tribunal significantly modified and amended the clear
terms of the parties’ contract documents by rewriting their
construction agreement and
207
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CE Construction Corporation vs. Araneta Center,
Inc.
Arbitral Tribunal for erroneously reckoning the sums due to
CECON, particularly in relying on factual considerations
that run afoul of contractual stipulations and on bases such
as industry practices and standards, which supposedly
should not have even been considered as the parties have
already adduced their respective evidence.103 It insists upon
CECON’s fault for delays and defects, making it liable for
liquidated damages.104
Though nominally modifying the CIAC Arbitral
Tribunal’s October 25, 2006 Decision, the Court of Appeals
actually reversed it on the pivotal matter of the
characterization of the contract between CECON and ACI.
Upon its characterization of the contract as one for a lump
sum fixed price, the Court of Appeals deleted much of the
CIAC Arbitral Tribunal’s monetary awards to CECON and
awarded liquidated damages to ACI.
On initial impression, what demands resolution is the
issue of whether or not the Court of Appeals erred in
characterizing the contractual arrangement between
petitioner CE Construction Corporation and respondent
Araneta Center, Inc. as immutably one for a lump sum
fixed price.
However, this is not merely a matter of applying and
deriving conclusions from cut and dried contractual
provisions. More accurately, what is on issue is whether or
not the Court of Appeals correctly held that the CIAC
Arbitral Tribunal acted beyond its jurisdiction in holding
that the price of P1,540,000,000.00 did not bind the parties
as an immutable lump sum. Subsumed in this issue is the
matter of whether or not the Court of Appeals correctly
ruled that CECON was rightfully entitled to time
extensions and that intervening circumstances had made
ACI liable for cost adjustments, increases borne by change
orders, additional overhead costs,
_______________
unilaterally imposing upon ACI newly-created obligations,
notwithstanding that there was no issue on the exact terms
of the contract documents and the intent of the parties in
executing the same.”
103 Id., at pp. 5894-5895.
104 Id., at pp. 5897-5898.
208
208 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
extended contractor’s all risk insurance coverage, increased
attendance fees vis-à-vis subcontractors, and arbitration
costs which it awarded to CECON.
This Court limits itself to the legal question of the CIAC
Arbitral Tribunal’s competence. Unless any of the
exceptional circumstances that warrant revisiting the
factual matter of the accuracy of the particulars of every
item awarded to the parties is availing, this Court shall not
embark on its own audit of the amounts owing to each.
I
This Court begins by demarcating the jurisdictional and
technical competence of the CIAC and of its arbitral
tribunals.
I.A
The Construction Industry Arbitration Commission was
a creation of Executive Order No. 1008, otherwise known as
the Construction Industry Arbitration Law.105 At inception,
it was
_______________
105 Though nominally an “executive order” the
Construction Industry Arbitration Law is a statute.
Jurisprudence has clarified that, in exercising legislative
powers, then President Marcos did not only use the
modality of presidential decrees, but also of executive
orders and letters of instruction. Though, this is not to say
that all executive orders and letters of intruction issued by
him are statutes.
In Garcia-Padilla v. Enrile, 206 Phil. 392, 428; 121 SCRA
472, 499 (1983) [Per J. De Castro, En Banc]:
To form part of the law of the land, the decree, order or
[letter of instruction] must be issued by the President in the
exercise of his extraordinary power of legislation as
contemplated in Section 6 of the 1976 amendments to the
Constitution, whenever in his judgment, there exists a
grave emergency or a threat or imminence thereof, or
whenever the interim Batasan[g] Pambansa or the regular
National Assembly fails or is unable to act adequately on
209
VOL. 836, AUGUST 9, 2017 209
CE Construction Corporation vs. Araneta Center,
Inc.
_______________
any matter for any reason that in his judgment requires
immediate action.
In Irene B. Cortes, Executive Legislation: The Philippine
Experience; 55 PHIL. L.J. 1, 27-29 (1979) Associate Justice
Irene Cortes noted that certain executive orders and letters
of instruction have indeed been on par with President
Marcos’ more commonly used mode of legislation (i.e.,
presidential decrees):
Another problem arises from lack of precision in the
appropriate use of one form of issuance as against another.
A presidential decree is equivalent to a statute enacted by
the legislature, and is thus superior to implementing rules
issued as executive orders or letter of instructions. But, it is
not unheard of for an executive order to amend or repeal a
presidential decree or a letter of instructions to amend an
executive order, or lay down a rule of law.
Associate Justice Cortes specifically cited as an example
Exec. Order No. 543 (1979), which abolished the Philippine
Center for Advanced Studies, a creation of Pres. Decree No.
342 (1973). In disproving that Exec. Order No. 543 was
issued merely as an implementing rule, she explained that
its object — a state university — could not have fallen
under the scope of the President’s reorganization powers,
for which an executive order issued merely as an
implementing rule was sufficient.
The Construction Industry Arbitration Law’s own
nomenclature reveals the intent that it be a statute. Its
whereas clauses and declaration of policy reveal the
urgency that impelled immediate action for the President to
exercise his concurrent legislative powers.
Any doubt on the statutory efficacy of the Construction
Industry Arbitration Law is addressed by Congress’ own,
voluntary and repeated reference to and affirmation of it as
such a law. (SeeRep. Act No. 9184 and Rep. Act No. 9285).
Rep. Act No. 9285 did not only validate the Construction
Industry Arbitration Law, it also incorporated it into the
general statutory framework of alternative dispute
resolution.
Jurisprudence, too, has repeatedly and consistently referred
to it as such a “law.” See, for example, National Irrigation
Administration v. Court of Appeals, 376 Phil. 362; 318
SCRA 255 (1999) [Per CJ.Davide, Jr., First
Division]; Metropolitan Cebu Water District v. Mactan Rock
Industries, Inc., 690 Phil. 163; 675 SCRA 577 (2012)
[Per J. Mendoza, Third Division]; and The Manila
Insurance Co.,
210
210 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
under the administrative supervision of the Philippine
Domestic Construction Board106 which, in turn, was an
implementing agency of the Construction Industry
Authority of the Philippines (CIAP).107 The CIAP is
presently attached to the Department of Trade and
Industry.108
The CIAC was created with the specific purpose of an
“early and expeditious settlement of disputes”109cognizant
of the exceptional role of construction to “the furtherance of
national development goals.”110
Section 4 of the Construction Industry Arbitration Law
spells out the jurisdiction of the CIAC:
4. SectionJurisdiction.—The CIAC shall have original
and exclusive jurisdiction over disputes arising from, or
connected with, contracts entered into by parties involved
in construction in the Philippines, whether the dispute
arises before or after the completion of the contract, or after
the abandonment or breach thereof. These disputes may
involve government or private contracts. For the Board to
acquire jurisdiction, the parties to a dispute must agree to
submit the same to voluntary arbitration.
The jurisdiction of the CIAC may include but is not
limited to violation of specifications for materials and
workmanship; violation of the terms of agreement;
interpretation and/or application of contractual time and
delays; maintenance and defects; payment, default of
employer or contractor and changes in contract cost.
_______________
Inc. v. Amurao, 701 Phil. 557; 688 SCRA 609 (2013)
[Per J. Del Castillo, Second Division].
106 Exec. Order No. 1008, Sec. 3.
107 Id., 4th Whereas Clause.
108 See Department of Trade and Industry, Attached
Agencies, <http://www.dti.gov.ph/about/the-
organization/attached-agencies> (last visited on August 8,
2017).
109 Exec. Order No. 1008, Sec. 2.
110 Id., 3rd Whereas Clause.
211
VOL. 836, AUGUST 9, 2017 211
CE Construction Corporation vs. Araneta Center,
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Excluded from the coverage of this law are disputes
arising from employer-employee relationships which shall
continue to be covered by the Labor Code of the Philippines.
Though created by the act of a Chief Executive who then
exercised legislative powers concurrently with the Batasang
Pambansa, the creation, continuing existence, and
competence of the CIAC have since been validated by acts
of Congress.
Republic Act No. 9184 or the Government Procurement
Reform Act, enacted on January 10, 2003, explicitly
recognized and confirmed the competence of the CIAC:
59. SectionArbitration.—Any and all disputes arising
from the implementation of a contract covered by this Act
shall be submitted to arbitration in the Philippines
according to the provisions of Republic Act No. 876,
otherwise known as the “Arbitration Law”: Provided,
however, That, disputes that are within the competence of
the Construction Industry Arbitration Commission to
resolve shall be referred thereto. The process of arbitration
shall be incorporated as a provision in the contract that will
be executed pursuant to the provisions of this
Act: Provided, That by mutual agreement, the parties may
agree in writing to resort to alternative modes of dispute
resolution. (Emphasis supplied)
Arbitration of construction disputes through the CIAC
was formally incorporated into the general statutory
framework on alternative dispute resolution through
Republic Act No. 9285, the Alternative Dispute Resolution
Act of 2004 (ADR Law). Chapter 6, Section 34 of ADR Law
made specific reference to the Construction Industry
Arbitration Law, while Section 35 confirmed the CIAC’s
jurisdiction:
212
212 SUPREME COURT REPORTS
 ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
CHAPTER 6
ARBITRATION OF CONSTRUCTION DISPUTES
34. SectionArbitration of Construction Disputes:
Governing Law.—The arbitration of construction disputes
shall be governed by Executive Order No. 1008, otherwise
known as the Construction Industry Arbitration Law.
35. SectionCoverage of the Law.—Construction
disputes which fall within the original and exclusive
jurisdiction of the Construction Industry Arbitration
Commission (the “Commission”) shall include those
between or among parties to, or who are otherwise bound
by, an arbitration agreement, directly or by reference
whether such parties are project owner, contractor,
subcontractor, fabricator, project manager, design
professional, consultant, quantity surveyor, bondsman or
issuer of an insurance policy in a construction project.
The Commission shall continue to exercise original and
exclusive jurisdiction over construction disputes although
the arbitration is “commercial” pursuant to Section 21 of
this Act.
I.B
The CIAC does not only serve the interest of speedy
dispute resolution, it also facilitates authoritativedispute
resolution. Its authority proceeds not only from juridical
legitimacy but equally from technical expertise. The
creation of a special adjudicatory body for construction
disputes presupposes distinctive and nuanced competence
on matters that are conceded to be outside the innate
expertise of regular courts and adjudicatory bodies
concerned with other specialized fields. The CIAC has the
state’s confidence concerning the entire technical expanse of
construction, defined in jurisprudence as “referring to all
on-site works on buildings or altering structures, from land
clearance through completion including ex-
213
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CE Construction Corporation vs. Araneta Center,
Inc.
cavation, erection and assembly and installation of
components and equipment.”111
Jurisprudence has characterized the CIAC as a quasi-
judicial, administrative agency equipped with technical
proficiency that enables it to efficiently and promptly
resolve conflicts:
[The CIAC] is a quasi-judicial agency. A quasi-judicial
agency or body has been defined as an organ of government
other than a court and other than a legislature, which
affects the rights of private parties through either
adjudication or rule-making. The very definition of an
administrative agency includes its being vested with quasi-
judicial powers. The ever increasing variety of powers and
functions given to administrative agencies recognizes the
need for the active intervention of administrative agencies
in matters calling for technical knowledge and speed in
countless controversies which cannot possibly be handled
by regular courts. The CIAC’s primary function is that of a
quasi-judicial agency, which is to adjudicate claims and/or
determine rights in accordance with procedures set forth in
E.O. No. 1008.112
 The most recent jurisprudence maintains that the CIAC
is a quasi-judicial body. This Court’s November 23, 2016
Decision in Fruehauf Electronics v. Technology Electronics
Assem-
_______________
111 Fort Bonifacio Development Corporation v.
Sorongon, 605 Phil. 689, 696; 587 SCRA 613, 621 (2009)
[Per J. Tinga, Second Division].
112 Metro Construction, Inc. v. Chatham Properties,
Inc., 418 Phil. 176, 202-203; 365 SCRA 697, 722 (2001)
[Per CJ. Davide, Jr., First Division], citing Presidential
Anti-Dollar Salting Task Force v. CA, 253 Phil. 344; 171
SCRA 348 (1989) [Per J. Sarmiento, En Banc]; Tropical
Homes, Inc. v. National Housing Authority, 236 Phil. 580;
152 SCRA 540 (1987) [Per J.Gutierrez, Jr., En
Banc]; Antipolo Realty Corp. v. National Housing Authority,
237 Phil. 389; 153 SCRA 399 (1987) [Per J. Feliciano, En
Banc]; and Solid Homes, Inc. v. Payawal, 257 Phil. 914; 177
SCRA 72 (1989) [Per J. Cruz, First Division].
214
214 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
bly and Management Pacific113 distinguished construction
arbitration, as well as voluntary arbitration pursuant to
Article 219(14) of the Labor Code,114 from commercial
arbitration. It ruled that commercial arbitral tribunals
are notquasi-judicial agencies, as they are purely ad
hocbodies operating through contractual consent and as
they intend to serve private, proprietary interests.115 In
contrast, voluntary arbitra-
_______________
113 Fruehauf Electronics Philippines Corporation v.
Technology Electronics Assembly and Management Pacific
Corporation, G.R. No. 204197, November 23, 2016, 810
SCRA 280 [Per J. Brion, Second Division].
114 LABOR CODE, Art. 219 provides:
219. ArticleDefinitions.— . . . .
“Voluntary Arbitrator” means any person accredited by
the Board as such, or any person named or designated in
the Collective Bargaining Agreement by the parties to act
as their Voluntary Arbitrator, or one chosen with or without
the assistance of the National Conciliation and Mediation
Board, pursuant to a selection procedure agreed upon in the
Collective Bargaining Agreement, or any official that may
be authorized by the Secretary of Labor and Employment to
act as Voluntary Arbitrator upon the written request and
agreement of the parties to a labor dispute. 14.
115 Fruehauf Electronics Philippines Corporation v.
Technology Electronics Assembly and Management
Pacific Corporation, supra. It stated:
Quasi-judicial or administrative adjudicatory power is
the power: (1) to hear and determine questions of fact to
which legislative policy is to apply, and (2) to decide in
accordance with the standards laid down by the law itself in
enforcing and administering the same law. Quasi-judicial
power is only exercised by administrative agencies — legal
organs of the government.
Quasi-judicial bodies can only exercise such powers and
jurisdiction as are expressly or by necessary implication
conferred upon them by their enabling statutes. Like
courts, a quasi-judicial body’s jurisdiction over a subject
matter is conferred by law and exists independently from
the will of the parties. As government organs necessary for
an effective legal system, a quasi-judicial tribunal’s legal
existence continues beyond the resolution of a specific
dispute. In other words, quasi-judicial bodies are creatures
of law.
215
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CE Construction Corporation vs. Araneta Center,
Inc.
tion under the Labor Code and construction arbitration
operate through the statutorily vested jurisdiction of
government instrumentalities that exist independently of
the will of contracting parties and to which these parties
submit. They proceed from the public interest imbuing their
respective spheres:
Voluntary Arbitrators resolve labor disputes and
grievances arising from the interpretation of Collective
Bargaining Agreements. These disputes were specifically
excluded from the coverage of both the Arbitration Law and
the ADR Law.
Unlike purely commercial relationships, the relationship
between capital and labor are heavily impressed with
public interest. Because of this, Voluntary Arbitrators
authorized to resolve labor disputes have been clothed with
quasi-judicial authority.
On the other hand, commercial relationships covered by
our commercial arbitration laws are purely private and
contractual in nature. Unlike labor relationships, they do
not possess the same compelling state interest that would
justify state interference into the autonomy of contracts.
Hence, commercial arbitration is a purely private system of
adjudication facilitated by pri-
_______________
As a contractual and consensual body, the arbitral
tribunal does not have any inherent powers over the
parties. It has no power to issue coercive writs or
compulsory processes. Thus, there is a need to resort to the
regular courts for interim measures of protection and for
the recognition or enforcement of the arbitral award.
The arbitral tribunal acquires jurisdiction over the
parties and the subject matter through stipulation. Upon
the rendition of the final award, the tribunal
becomes functus officio and — save for a few exceptions —
ceases to have any further jurisdiction over the dispute. The
tribunal’s powers (or in the case of ad hoc tribunals, their
very existence) stem from the obligatory force of the
arbitration agreement and its ancillary stipulations. Simply
put, an arbitral tribunal is a creature of contract. (Citations
omitted)
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vate citizens instead of government instrumentalities
wielding quasi-judicial powers.
Moreover, judicial or quasi-judicial jurisdiction cannot be
conferred upon a tribunal by the parties alone. The Labor
Code itself confers subject-matter jurisdiction to Voluntary
Arbitrators.
Notably, the other arbitration body listed in Rule 43 —
the Construction Industry Arbitration Commission (CIAC)
— is also a government agency attached to the Department
of Trade and Industry. Its jurisdiction is likewise conferred
by statute. By contrast, the subject matter jurisdiction of
commercial arbitrators is stipulated by the
parties.116(Emphasis supplied, citations omitted)
Consistent with the primacy of technical mastery,
Section 14 of the Construction Industry Arbitration Law on
the qualification of arbitrators provides:
14. SectionArbitrators.—A sole arbitrator or three
arbitrators may settle a dispute.
....
Arbitrators shall be men of distinction in whom the
business sector and the government can have confidence.
They shall not be permanently employed with the CIAC.
Instead, they shall render services only when called to
arbitrate. For each dispute they settle, they shall be given
fees.
Section 8.1 of the Revised Rules of Procedure Governing
Construction Arbitration establishes that the foremost
qualification of arbitrators shall be technical proficiency. It
explicitly enables not only lawyers but also “engineers,
architects, construction managers, engineering consultants,
and businessmen familiar with the construction industry”
to serve as arbitrators:
_______________
116 Id., at pp. 307-308.
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CE Construction Corporation vs. Araneta Center,
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8.1. SectionGeneral Qualification of Arbitrators.—The
Arbitrators shall be men of distinction in whom the
business sector and the government can have
confidence. They shall be technically qualified to resolve any
construction dispute expeditiously and equitably. The
Arbitrators shall come from different professions. They may
include engineers, architects, construction managers,
engineering consultants, and businessmen familiar with the
construction industry and lawyers who are experienced in
construction disputes. (Emphasis supplied)
Of the 87 CIAC-accredited arbitrators as of January
2017, only 33 are lawyers. The majority are experts from
construction-related professions or engaged in related
fields.117
Apart from arbitrators, technical experts aid the CIAC
in dispute resolution. Section 15 of the Construction
Industry Arbitration Law provides:
15. SectionAppointment of Experts.—The services of
technical or legal experts may be utilized in the settlement
of disputes if requested by any of the parties or by the
Arbitral Tribunal. If the request for an expert is done by
either or by both of the parties, it is necessary that the
appointment of the expert be confirmed by the Arbitral
Tribunal.
Whenever the parties request for the services of an
expert, they shall equally shoulder the expert’s fees and
expenses, half of which shall be deposited with the
Secretariat before the expert renders service. When only
one party makes the request, it shall deposit the whole
amount required.
_______________
117 Construction Arbitration and Mediation,
Construction Industry Authority of the Philippines,
available at
<http://www.ciap.dti.gov.ph/content/construction-
arbitrationmediation> (last visited on August 8, 2017).
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II
Consistent with CIAC’s technical expertise is the
primacy and deference accorded to its decisions. There is
only a very narrow room for assailing its rulings.
Section 19 of the Construction Industry Arbitration Law
establishes that CIAC arbitral awards may not be assailed,
except on pure questions of law:
19. SectionFinality of Awards.—The arbitral award shall
be binding upon the parties. It shall be final and
inappealable except on questions of law which shall be
appealable to the Supreme Court.
Rule 43 of the 1997 Rules of Civil Procedure
standardizes appeals from quasi-judicial agencies.118Rule
43, Section 1 explicitly lists CIAC as among the quasi-
judicial agencies covered by Rule 43.119Section 3 indicates
that appeals through Petitions for Review under Rule 43
are to “be taken to the Court of Ap-
_______________
118 See Metro Construction, Inc. v. Chatham Properties,
Inc., supra note 112.
119 RULES OF COURT, Rule 43, Sec. 1 provides:
1. SectionScope.—This Rule shall apply to appeals
from judgments or final orders of the Court of Tax Appeals
and from awards, judgments, final orders or resolutions of
or authorized by any quasi-judicial agency in the exercise of
its quasi-judicial functions. Among these agencies are the
Civil Service Commission, Central Board of Assessment
Appeals, Securities and Exchange Commission, Office of the
President, Land Registration Authority, Social Security
Commission, Civil Aeronautics Board, Bureau of Patents,
Trademarks and Technology Transfer, National
Electrification Administration, Energy Regulatory Board,
National Telecommunications Commission, Department of
Agrarian Reform under Republic Act No. 6657, Government
Service Insurance System, Employees Compensation
Commission, Agricultural Inventions Board, Insurance
Commission, Philippine Atomic Energy Commission, Board
of Investments, Construction Industry Arbitration
Commission, and voluntary arbitrators authorized by law.
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peals . . . whether the appeal involves questions of fact, of
law, or mixed questions of fact and law.”120
This is not to say that factual findings of CIAC arbitral
tribunals may now be assailed before the Court of Appeals.
Section 3’s statement “whether the appeal involves
questions of fact, of law, or mixed questions of fact and law”
merely recognizes variances in the disparate modes of
appeal that Rule 43 standardizes: there were those that
enabled questions of fact; there were those that enabled
questions of law, and there were those that enabled mixed
questions fact and law. Rule 43 emphasizes that though
there may have been variances, all appeals under its scope
are to be brought before the Court of Appeals. However, in
keeping with the Construction Industry Arbitration Law,
any appeal from CIAC arbitral tribunals must remain
limited to questions of law.
Hi-Precision Steel Center, Inc. v. Lim Kim Steel Builders,
Inc.121 explained the wisdom underlying the limitation of
appeals to pure questions of law:
Section 19 makes it crystal clear that questions of fact
cannot be raised in proceedings before the Supreme Court
— which is not a trier of facts — in respect of an arbitral
award rendered under the aegis of the CIAC. Consideration
of the animating purpose of voluntary arbitration in general
and arbitration under the aegis of the CIAC in particular,
requires us to apply rigorously the above principle
embodied in Section 19 that the Arbitral Tribunal’s findings
of fact shall be final and unappealable.
Voluntary arbitration involves the reference of a dispute
to an impartial body, the members of which are
_______________
120 RULES OF COURT, Rule 43, Sec. 3 provides:
3. SectionWhere to appeal.—An appeal under this
Rule may be taken to the Court of Appeals within the
period and in the manner herein provided, whether the
appeal involves questions of fact, of law, or mixed questions
of fact and law.
121 298-A Phil. 361; 228 SCRA 397 (1993)
[Per J. Feliciano, Third Division].
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chosen by the parties themselves, which parties freely
consent in advance to abide by the arbitral award issued
after proceedings where both parties had the opportunity to
be heard. The basic objective is to provide a speedy and
inexpensive method of settling disputes by allowing the
parties to avoid the formalities, delay, expense and
aggravation which commonly accompany ordinary
litigation, especially litigation which goes through the
entire hierarchy of courts. [The Construction Industry
Arbitration Law] created an arbitration facility to which the
construction industry in the Philippines can have recourse.
The [Construction Industry Arbitration Law] was enacted
to encourage the early and expeditious settlement of
disputes in the construction industry, a public policy the
implementation of which is necessary and important for the
realization of national development goals.122
Consistent with this restrictive approach, this Court is
duty-bound to be extremely watchful and to ensure that an
appeal does not become an ingenious means for
undermining the integrity of arbitration or for conveniently
setting aside the conclusions arbitral processes make. An
appeal is not an artifice for the parties to undermine the
process they voluntarily elected to engage in. To prevent
this Court from being a party to such perversion, this
Court’s primordial inclination must be to uphold the factual
findings of arbitral tribunals:
Aware of the objective of voluntary arbitration in the
labor field, in the construction industry, and in any other
area for that matter, the Court will not assist one or the
other or even both parties in any effort to subvert or defeat
that objective for their private purposes. The Court will not
review the factual findings of an arbitral tribunal upon the
artful allegation that such body had “misapprehended the
facts” and will not pass upon issues which are, at bottom,
issues of fact, no matter how clev-
_______________
122 Id., at p. 372; pp. 404-405.
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erly disguised they might be as “legal questions.” The
parties here had recourse to arbitration and chose the
arbitrators themselves; they must have had confidence in
such arbitrators. The Court will not, therefore, permit the
parties to relitigate before it the issues of facts previously
presented and argued before the Arbitral Tribunal, save
only where a very clear showing is made that, in reaching
its factual conclusions, the Arbitral Tribunal committed an
error so egregious and hurtful to one party as to constitute
a grave abuse of discretion resulting in lack or loss of
jurisdiction. Prototypical examples would be factual
conclusions of the Tribunal which resulted in deprivation of
one or the other party of a fair opportunity to present its
position before the Arbitral Tribunal, and an award
obtained through fraud or the corruption of arbitrators. Any
other, more relaxed, rule would result in setting at naught
the basic objective of a voluntary arbitration and would
reduce arbitration to a largely inutile
institution.123 (Emphasis supplied, citations omitted)
Thus, even as exceptions to the highly restrictive nature
of appeals may be contemplated, these exceptions are only
on the narrowest of grounds. Factual findings of CIAC
arbitral tribunals may be revisited not merely because
arbitral tribunals may have erred, not even on the already
exceptional grounds traditionally available in Rule 45
Petitions.124 Rather,
_______________
123 Id., at pp. 373-374; pp. 405-407.
124 In Marasigan v. Fuentes, G.R. No. 201310, January
11, 2016, 778 SCRA 645 [Per J. Leonen, Second Division];
It is basic that petitions for review on certiorari under
Rule 45 may only raise pure questions of law and that
findings of fact are generally binding and conclusive on this
court. Nevertheless, there are recognized exceptions that
will allow this court to overturn the factual findings
confronting it. These exceptions are the following:
When the conclusion is a finding grounded entirely on
speculation, surmises and conjectures; (1)
When the inference made is manifestly mistaken,
absurd or impossible; (2)
Where there is a grave abuse of discretion; (3)
 222 When the Court of Appeals, in making its findings, went
222 SUPREME COURT REPORTS beyond the issues of the case and the same is contrary to
ANNOTATED the admissions of both appellant and appellee; (6)
CE Construction Corporation vs. Araneta Center, When the findings are contrary to those of the trial
Inc. court; (7)
When the findings of fact are conclusions without
factual findings may be reviewed only in cases where the
citation of specific evidence on which they are based; (8)
CIAC arbitral tribunals conducted their affairs in a
When the facts set forth in the petition as well as in the
haphazard, immodest manner that the most basic integrity
petitioners’ main and reply briefs are not disputed by the
of the arbitral process was imperiled. In Spouses David v.
respondents; and (9)
Construction Industry and Arbitration Commission:125
When the findings of fact of the Court of Appeals are
We reiterate the rule that factual findings of construction
premised on the supposed absence of evidence and
arbitrators are final and conclusive and not reviewable by
contradicted by the evidence on record. (Citations omitted)
this Court on appeal, except when the petitioner proves
(10)
affirmatively that: (1) the award was procured by
125 479 Phil. 578; 435 SCRA 654 (2004) [Per J. Puno,
corruption, fraud or other undue means; (2) there was
Second Division].
evident partiality or corruption of the arbitrators or of any
of them; (3) the arbitrators were guilty of misconduct in
refusing to postpone the hearing upon sufficient cause
shown, or in refusing to hear evidence pertinent and 223
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arbitrators were disqualified to act as such under section
CE Construction Corporation vs. Araneta Center,
nine of Republic Act No. 876 and willfully refrained from
Inc.
disclosing such disqualifications or of any other
misbehavior by which the rights of any party have been definite award upon the subject matter submitted to them
materially prejudiced; or (5) the arbitrators exceeded their was not made.126 (Citation omitted)
powers, or so imperfectly executed them, that a mutual,
final and
Guided by the primacy of CIAC’s technical competence,
_______________ in exercising this Court’s limited power of judicial review,
this Court proceeds to rule on whether or not the Court of
When the judgment is based on a misapprehension of Appeals erred in its assailed decisions.
facts; (4)
When the findings of fact are conflicting; (5) III
 Properly discerning the issues in this case reveals that
what is involved is not a mere matter of contractual
interpretation but a question of the CIAC Arbitral
Tribunal’s exercise of its powers.
III.A
F.F. Cruz v. HR Construction127distinguished questions
of law, properly cognizable in appeals from CIAC arbitral
awards, from questions of fact:
A question of law arises when there is doubt as to what
the law is on a certain state of facts, while there is a
question of fact when the doubt arises as to the truth or
falsity of the alleged facts. For a question to be one of law,
the same must not involve an examination of the probative
value of the evidence presented by the litigants or any of
them. The resolution of the issue must rest solely on what
the law provides on the given set of circumstances. Once it
is clear that the issue invites a review of the evidence
presented, the question posed is one of fact.128
_______________
126 Id., at p. 590; p. 666.
127 684 Phil. 330; 668 SCRA 302 (2012) [Per J. Reyes,
Second Division].
128 Id., at p. 346; p. 317, citingVda. de Formoso v.
Philippine National Bank, 665 Phil. 174; 650 SCRA 35
(2011) [Per J. Mendoza, Second Division].
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It further explained that an inquiry into the true
intention of the contracting parties is a legal, rather than a
factual issue:
On the surface, the instant petition appears to merely
raise factual questions as it mainly puts in issue the
appropriate amount that is due to HRCC. However, a more
thorough analysis of the issues raised by FFCCI would
show that it actually asserts questions of law.
FFCCI primarily seeks from this Court a determination
of whether [the] amount claimed by HRCC in its progress
billing may be enforced against it in the absence of a joint
measurement of the former’s completed works. Otherwise
stated, the main question advanced by FFCCI is this: in the
absence of the joint measurement agreed upon in the
Subcontract Agreement, how will the completed works of
HRCC be verified and the amount due thereon be
computed?
The determination of the foregoing question entails an
interpretation of the terms of the Subcontract Agreement vis-
à-visthe respective rights of the parties herein. On this
point, it should be stressed that where an interpretation of
the true agreement between the parties is involved in an
appeal, the appeal is in effect an inquiry of the law between
the parties, its interpretation necessarily involves a question
of law.
Moreover, we are not called upon to examine the
probative value of the evidence presented before the CIAC.
Rather, what is actually sought from this Court is an
interpretation of the terms of the Subcontract Agreement as
it relates to the dispute between the parties.129(Emphasis
supplied)
_______________
 129 Id., at pp. 346-347; pp. 317-318, citing Philippine
National Construction Corporation v. Court of Appeals, 541
Phil. 658; 512 SCRA 684 (2007) [Per J. Chico-Nazario,
Third Division].
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Though similarly concerned with “an interpretation of
the true agreement between the parties,”130 this case is not
entirely congruent with F.F. Cruz.
In F.F. Cruz, the parties’ agreement had been clearly set
out in writing. There was a definitive instrument which
needed only to be consulted to ascertain the parties’ intent:
In resolving the dispute as to the proper valuation of the
works accomplished by HRCC, the primordial consideration
should be the terms of the Subcontract Agreement. It is
basic that if the terms of a contract are clear and leave no
doubt upon the intention of the contracting parties, the
literal meaning of its stipulations shall control.131
Thus, this Court concluded:
Pursuant to the terms of payment agreed upon by the
parties, FFCCI obliged itself to pay the monthly progress
billings of HRCC within 30 days from receipt of the same.
Additionally, the monthly progress billings of HRCC should
indicate the extent of the works completed by it, the same
being essential to the valuation of the amount that FFCCI
would pay to HRCC.132
III.B
In this case, there is no established contract that simply
required interpretation and application.
The assailed Court of Appeals’ April 28, 2008 Decision
implies that all that had to be done to resolve the present
controversy was to apply the supposedly clear and
unmistakable terms of the contract between ACI and
CECON. It even echoes the words of F.F. Cruz:
_______________
130 Id.
131 Id., at pp. 347-348; pp. 318-319, citing Civil Code,
Art. 1370.
132 Id., at p. 349; p. 320.
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It is a legal principle of long standing that when the
language of the contract is explicit, leaving no doubt as to
the intention of the parties, the courts may not read into it
any other intention that would contradict its plain import.
The clear terms of the contract should never be the subject
matter of interpretation. Neither abstract justice nor the
rule of liberal interpretation justifies the creation of a
contract for the parties which they did not make themselves
or the imposition upon one party to a contract or obligation
not assumed simply or merely to avoid seeming hardships.
Their true meaning must be enforced, as it is to be
presumed that the contracting parties know their scope and
effects.
....
The Contract Documents expressly characterize the
construction contract between [ACI] and CECON as “lump
sum” and “fixed price” in nature. As a consequence, the
Contract Documents expressly prohibit any adjustment of
the contract sum due to any changes or fluctuations in the
cost of labor, materials or other matters.133 (Citations
omitted)
Upon its characterization of the contract as one for the
lump sum, fixed price of P1,540,000,000.00, the Court of
Appeals faulted the CIAC Arbitral Tribunal for acting in
excess of jurisdiction as it supposedly countermanded the
parties’ agreement, or worse, conjured its own terms for the
parties’ compliance.134
It was the Court of Appeals, not the CIAC Arbitral
Tribunal, that committed serious error.
To rule that the CIAC Arbitral Tribunal modified the
parties’ agreement because it was indisputably one for a
lump sum, fixed price of P1,540,000,000.00 is begging the
question. The Court of Appeals used a conclusion as a
premise to support itself. It erroneously jumped to a
conclusion only to plead
_______________
133 Rollo, pp. 32-37.
134 Id., at pp. 32-33.
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this conclusion in support of points that should have made
up its anterior framework, points that would have been the
ones to lead to a conclusion. It then used this abortive
conclusion to injudiciously dispose of the case.
The Court of Appeals took the parties’ contractual
relation as a revealed and preordained starting point. Then,
it dismissed every prior or subsequent detail that
contradicted this assumption. It thereby conveniently
terminated the discussion before it even began.
III.C
There was never a meeting of minds on the price of
P1,540,000,000.00. Thus, that stipulation could not have
been the basis of any obligation.
The only thing that ACI has in its favor is its initial
delivery of tender documents to prospective bidders.
Everything that transpired after this delivery militates
against ACI’s position.
Before proceeding to a consideration of the
circumstances that negate a meeting of minds, this Court
emphasizes that ACI would have this Court sustain claims
premised on supposed inviolable documents. Yet, it did not
annex copies of these documents either to its Comment or to
its Memorandum.
ACI leaves this Court compelled to rely purely on their
packaged presentation and in a bind, unable to verify even
the accuracy of the syntax of its citations. This Court
cannot approve of this predicament. To cursorily acquiesce
to ACI’s overtures without due diligence and substantiation
is being overly solicitous, even manifestly partisan.
ACI and its counsel must have fully known the
importance of equipping this Court with a reliable means of
confirmation, especially in a case so steeped in the sway of
circumstances. ACI’s omission can only work against its
cause.
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By delivering tender documents to bidders, ACI made an
offer. By these documents, it specified its terms and defined
the parameters within which bidders could operate. These
tender documents, therefore, guided the bidders in
formulating their own offers to ACI, or, even more
fundamentally, helped them make up their minds if they
were even willing to consider undertaking the proposed
project. In responding and submitting their bids,
contractors, including CECON, did not peremptorily
become subservient to ACI’s terms. Rather, they made their
own representations as to their own willingness and ability.
They adduced their own counteroffers, although these were
already tailored to work within ACI’s parameters.
These exchanges were in keeping with Article 1326 of
the Civil Code:
Advertisements for bidders are simply invitations to make
proposals, and the advertiser is not bound to accept the
highest or lowest bidder, unless the contrary appears.
1326. Article
The mere occurrence of these exchanges of offers fails to
satisfy the Civil Code’s requirement of absolute and
unqualified acceptance:
Consent is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to
constitute the contract. 1319. Article The offer must be
certain and the acceptance absolute. A qualified acceptance
constitutes a counteroffer.
Acceptance made by letter or telegram does not bind the
offerer except from the time it came to his knowledge. The
contract, in such a case, is presumed to have been entered
into in the place where the offer was made. (Emphasis
supplied)
Subsequent events do not only show that there was no
meeting of minds on CECON’s initial offered contract sum
of P1,449,089,174.00 as stated in its August 30, 2002 bid.
They
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also show that there was never any meeting of minds on the
contract sum at all.
In accordance with Article 1321 of the Civil Code,135 an
offeror may fix the time of acceptance. Thus, CECON’s
August 30, 2002 offer of P1,449,089,174.00 “specifically
stated that its bid was valid for only ninety (90) days, or
only until 29 November 2002.”136November 29, 2002 lapsed
and ACI failed to manifest its acceptance of CECON’s
offered contract sum.
It was only sometime after November 29, 2002 that ACI
verbally informed CECON that the contract was being
awarded to it. Through a telephone call on December 7,
2002, ACI informed CECON that it may commence
excavation works. However, there is no indication that an
agreement was reached on the contract sum in any of these
conversations. ACI, CECON, the CIAC Arbitral Tribunal,
and the Court of Appeals all concede that negotiations
persisted.
Still without settling on a contract sum, even the object
of the contract was subjected to multiple modifications.
Absent a concurrence of consent and object, no contract was
perfected.137
An office tower atop Part A was included in CECON’s
scope of works and the contract sum increased to
P1,582,810,525.00. Price fluctuations were conceded after
this and the project cost was again adjusted to
P1,613,615,244.00. Thereafter,
_______________
135 CIVIL CODE, Art. 1321 provides:
The person making the offer may fix the time, place, and
manner of acceptance, all of which must be complied with.
1321. Article
136 Rollo, p. 6222, CECON’s Memorandum.
137 CIVIL CODE, Art. 1318 provides:
There is no contract unless the following requisites
concur: 1318. Article
Consent of the contracting parties; (1)
Object certain which is the subject matter of the
contract; (2)
Cause of the obligation which is established. (3)
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CECON agreed to extend a discount and reduced its offered
project cost to P1,540,000,000.00.138
After all these, ACI demurred on the terms of its own
tender documents and changed the project from one
encompassing both design and construction to one that was
limited to construction.
Though not pertaining to the object of the contract itself
but only to one (1) of its many facets, ACI also removed
from CECON’s scope of works the acquisition of elevators,
escalators, chillers, generator sets, indoor substations,
cooling towers, pumps, and tanks. However, much later,
ACI reneged on its own and opted to still obtain pumps,
tanks, and cooling towers through CECON.
It is ACI’s contention that the offered project cost of
P1,540,000,000.00 is what binds the parties because its
June 2, 2003 letter indicated acceptance of this offered
amount.
This is plain error.
CECON was never remiss in impressing upon ACI that
the P1,540,000,000.00 offer was not perpetually availing.
Without ACI’s timely acceptance, on December 27, 2002,
CECON wrote to ACI emphasizing that the quoted sum of
P1,540,000,000.00 was “based [only] upon the prices
prevailing at December 26, 2002” levels.139 On January 8,
2003, CECON notified ACI of further increases in costs and
specifically stated that “[f]urther delay in the acceptance of
the revised offer and release of the down payment may
affect the revised lump sum amount.”140 Finally, on
January 21, 2003, CECON wrote again to ACI,141stating
that the contract sum had to be increased to
P1,594,631,418.00. CECON also specifically stated,
consistent with Article 1321 of the Civil Code, that its
_______________
 138 Rollo, pp. 6224-6225 and 6383.
139 Id., at pp. 549 and 6224.
140 Id., at pp. 3773 and 6225.
141 Id., at pp. 556-557.
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tender of this adjusted price was valid only until January
31, 2003, as further price changes may be forthcoming.
CECON also impressed upon ACI that the 400 days allotted
for the completion of the project had to be adjusted.142
When ACI indicated acceptance, CECON’s
P1,540,000,000.00 offer had been superseded. Even
CECON’s subsequent offer of P1,594,631,418.00 had, by
then, lapsed by more than four (4) months. Apparently
totally misinformed, ACI’s acceptance letter did not even
realize or remotely reference CECON’s most recent
P1,594,631,418.00 stipulation but insisted on the passi offer
of P1,540,000,000.00 from the past year.
ACI’s supposed acceptance was not an effective,
unqualified acceptance, as contemplated by Article 1319 of
the Civil Code. At most, it was a counteroffer to revert to
P1,540,000,000.00.
ACI’s June 2, 2003 letter stated an undertaking: “This
notwithstanding, formal contract documents embodying
these positions will shortly be prepared and forwarded to
you for execution.”143 Through this letter, ACI not only
undertook to deliver documents, it also admitted that the
final, definitive terms between the parties had yet to be
articulated in writing.
ACI’s delivery CECON’s review, and both parties’ final
act of formalizing their respective consent and affixing their
respective signatures would have established a clear point
in which the contract between ACI and CECON has been
perfected. These points, i.e., ACI’s delivery, CECON’s
review, and parties’ formalization, too, would have
validated the Court of Appeals’ assertion that all that
remained to be done was to apply unequivocal contractual
provisions.
ACI would fail on its own undertaking.
_______________
142 Id., at pp. 556 and 6224-6225.
143 Id., at p. 560.
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III.D
Without properly executed contract documents, what
would have been a straightforward exercise, akin to the
experience in F.F. Cruz, became a drawn out fact-finding
affair. The situation that ACI engendered made it
necessary for the CIAC Arbitral Tribunal to unravel the
terms binding ACI to CECON from sources other than
definitive documents.
It is these actions of the CIAC Arbitral Tribunal that
raise an issue, purely as a matter of law, now the subject of
this Court’s review; that is, faced with
the lacunae confronting it, whether or not the CIAC
Arbitral Tribunal acted within its jurisdiction.
IV
The CIAC Arbitral Tribunal did not act in excess of its
jurisdiction. Contrary to the Court of Appeals’ and ACI’s
assertions, it did not draw up its own terms and force these
terms upon ACI and CECON.
IV.A
The CIAC Arbitral Tribunal was not confronted with a
barefaced controversy for which a formulaic resolution
sufficed. More pressingly, it was confronted with a state of
affairs where CECON rendered services to ACI, with
neither definitive governing instruments nor a confirmed,
fixed remuneration for its services. Thus, did the CIAC
Arbitral Tribunal go about the task of ascertaining the sum
properly due to CECON.
This task was well within its jurisdiction. This
determination entailed the full range of subjects expressly
stipulated by Section 4 of the Construction Industry
Arbitration Law to be within the CIAC’s subject matter
jurisdiction.
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4. SectionJurisdiction.—. . . .
The jurisdiction of the CIAC may include but is not
limited to violation of specifications for materials and
workmanship; violation of the terms of agreement;
interpretation and/or application of contractual time and
delays; maintenance and defects; payment, default of
employer or contractor and changes in contract cost.
CECON raised the principal issue of the payment due to
it on account, not only of fluctuating project costs but more
so because of ACI’s inability to timely act on many
contingencies, despite proper notice and communication
from and by CECON. Therefore, at the heart of the
controversy was the “interpretation and/or application of
contractual time and delays.” ACI’s counter-arguments, too,
directly appealed to CIAC’s subject matter jurisdiction. ACI
countered by asserting that sanctioning CECON’s claims
was tantamount to violating the terms of their agreement.
It further claimed liability on CECON’s part for
“maintenance and defects,” and for “violation of
specifications for materials and workmanship.”
ACI and CECON voluntarily submitted themselves to
the CIAC Arbitral Tribunal’s jurisdiction. The contending
parties’ own volition is at the inception of every
construction arbitration proceeding.144 Common sense
dictates that by the parties’ voluntary submission, they
acknowledge that an arbitral tribunal constituted under the
CIAC has full competence to rule on the dispute presented
to it. They concede this not only with respect to the literal
issues recited in their terms of reference, as ACI
suggests,145 but also with respect to their necessary
incidents. Accordingly, in delineating the authority of
arbitrators, the CIAC Rules of Procedure speak not only of
the literally recited issues but also of “related matters”:
_______________
 144 Exec. Order No. 1008, Section 4 states, among
others, that, “the parties to a dispute must agree to submit
the same to voluntary arbitration.”
145 Rollo, pp. 6454-6461.
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21.3. SECTIONExtent of power of arbitrator.—The
Arbitral Tribunal shall decide only such issues and related
matters as are submitted to them for adjudication. They
have no power to add, to subtract from, modify, or amend
any of the terms of the contract or any supplementary
agreement thereto, or any rule, regulation or policy
promulgated by the CIAC.
To otherwise be puritanical about cognizable issues
would be to cripple CIAC arbitral tribunals. It would
potentially be to condone the parties’ efforts at tying the
hands of tribunals through circuitous, trivial recitals that
fail to address the complete extent of their claims and
which are ultimately ineffectual in dispensing an
exhaustive and dependable resolution. Construction
arbitration is not a game of guile which may be left to
ingenious textual or technical acrobatics, but an endeavor
to ascertain the truth and to dispense justice “by every and
all reasonable means without regard to technicalities of law
or procedure.”146
IV.B
Two (2) guiding principles steered the CIAC Arbitral
Tribunal in going about its task. First was the basic matter
of fairness. Second was effective dispute resolution or the
overarching principle of arbitration as a mechanism
relieved of the encumbrances of litigation. In Section 1.1 of
the CIAC Rules of Procedure:
1.1. SECTIONStatement of policy and objectives.—It is
the policy and objective of these Rules to provide a fair and
expeditious resolution of construction disputes as an
alternative to judicial proceedings, which may restore the
disrupted harmonious and friendly relationships between or
among the parties. (Emphasis supplied)
_______________
146 CIAC RULES OF PROCEDURE, Sec. 1.3.
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CECON’s predicament demanded compensation. The
precise extent may yet to have been settled; yet, as the
exigencies that prompted CECON to request for arbitration
unraveled, it became clear that it was not for the CIAC
Arbitral Tribunal to turn a blind eye to CECON’s just
entitlement to compensation.
Jurisprudence has settled that even in cases where
parties enter into contracts which do not strictly conform to
standard formalities or to the typifying provisions of
nominate contracts, when one renders services to another,
the latter must compensate the former for the reasonable
value of the services rendered. This amount shall be fixed
by a court. This is a matter so basic, this Court has once
characterized it as one that “springs from the fountain of
good conscience”:
As early as 1903, in Perez v. Pomar, this Court ruled
that where one has rendered services to another, and these
services are accepted by the latter, in the absence of proof
that the service was rendered gratuitously, it is but just
that he should pay a reasonable remuneration therefore
because “it is a well-known principle of law, that no one
should be permitted to enrich himself to the damage of
another.” Similary in 1914, this Court declared that in this
jurisdiction, even in the absence of statute, “. . . under the
general principle that one person may not enrich himself at
the expense of another, a judgment creditor would not be
permitted to retain the purchase price of land sold as the
property of the judgment debtor after it has been made to
appear that the judgment debtor had no title to the land
and that the purchaser had failed to secure title thereto . . .”
The foregoing equitable principle which springs from the
fountain of good conscience are applicable to the case at
bar.147
_______________
147 Pacific Merchandising Corporation v. Consolacion
Insurance & Surety Co., Inc., 165 Phil. 543, 553-554; 73
SCRA 564, 572-573 (1976) [Per J. Antonio, Second
Division], citing Perez v. Pomar, 2 Phil. 682 (1903)
[Per J.Torres, En Banc]; and Bonzon v. Standard Oil Co.
and Osorio, 27 Phil. 141 (1914) [Per J. Carson, First
Division]. (Fn 16)
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Consistent with the Construction Industry Arbitration
Law’s declared policy,148 the CIAC Arbitral Tribunal was
specifically charged with “ascertain[ing] the facts in each
case by every and all reasonable means.”149 In discharging
its task, it was permitted to even transcend technical rules
on admissibility of evidence.150
IV.C
The reality of a vacuum where there were no definite
contractual terms, coupled with the demands of a “fair and
expeditious resolution” of a dispute centered on contractual
interpretation, called into operation Article 1371 of the
Civil Code:
In order to judge the intention of the contracting parties,
1371. Article their contemporaneous and subsequent acts
shall be principally considered. (Emphasis supplied)
Article 1379 of the Civil Code invokes principles from
the Revised Rules on Evidence. By invoking these
principles, Article 1379 makes them properly applicable in
every instance of contractual interpretation, even those
where the need for interpretation arises outside of court
proceedings:
The principles of interpretation stated in Rule 123 of the
Rules of Court shall likewise be observed in the
construction of contracts. 1379. Article
_______________
 148 Exec. Order No. 1008, Sec. 2.
149 CIAC RULES OF PROCEDURE, Rule 1, Sec. 1.3
provides:
1.3. SectionJudicial rules not controlling.—In any
arbitration proceedings under these Rules, the judicial
rules of evidence need not be controlling, and it is the spirit
and intention of these Rules to ascertain the facts in each
case by every and all reasonable means without regard to
technicalities of law or procedure.
150 Id.
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As with Article 1371, therefore, the following principles
from the Revised Rules on Evidence equally governed the
CIAC Arbitral Tribunal’s affairs:
Interpretation of Documents 4.
12. SectionInterpretation according to intention; general
and particular provisions.—In the construction of an
instrument, the intention of the parties is to be pursued; and
when a general and a particular provision are inconsistent,
the latter is paramount to the former. So a particular intent
will control a general one that is inconsistent with it.
13. SectionInterpretation according to circumstances.—
For the proper construction of an instrument, the
circumstances under which it was made, including the
situation of the subject thereof and of the parties to it, may
be shown, so that the judge may be placed in the position of
those whose language he is to interpret.
Within its competence and in keeping with basic
principles on contractual interpretation, the CIAC Arbitral
Tribunal ascertained the true and just terms governing ACI
and CECON. Thus, the CIAC Arbitral Tribunal did not
conjure its own contractual creature out of nothing. In
keeping with this, the CIAC Arbitral Tribunal found it
proper to sustain CECON’s position. There having been no
meeting of minds on the contract sum, the amount due to
CECON became susceptible to reasonable adjustment,
subject to proof of legitimate costs that CECON can adduce.
V
Unravelling the CIAC Arbitral Tribunal’s competence
and establishing how it acted consistent with law resolves
the principal legal issue before us. From this threshold, the
inquiry transitions to the matter of whether or not the
conclusions made by the CIAC Arbitral Tribunal were
warranted.
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They were. Far from being capricious, the CIAC Arbitral
Tribunal’s conclusions find solid basis in law and evidence.
V.A
The tender documents may have characterized the
contract sum as fixed and lump sum, but the premises for
this arrangement have undoubtedly been repudiated by
intervening circumstances.
When CECON made its offer of P1,540,000,000.00, it
proceeded from several premises. First, ACI would timely
respond to the representations made in its bid. Second,
CECON could act on the basis of prices prevailing
then. Third, the subject matter of the contract was the
entire expanse of design and construction covering all
elements disclosed in the tender documents, nothing more
and nothing less. Fourth, the basic specifications for
designing and building the Gateway Mall, as stated in the
tender documents, would remain consistent. Lastly, ACI
would timely deliver on its concomitant obligations.
Contrary to CECON’s reasonable expectations, ACI
failed to timely act either on CECON’s bid or on those of its
competitors. Negotiations persisted for the better part of
two (2) calendar years, during which the quoted contract
sum had to be revised at least five (5) times. The object of
the contract and CECON’s scope of work widely varied.
There were radical changes like the addition of an entire
office tower to the project and the change in the project’s
structural framing. There was also the undoing of CECON’s
freedom to design, thereby rendering it entirely dependent
on configurations that ACI was to unilaterally resolve. It
turned out that ACI took its time in delivering construction
drawings to CECON, with almost 38% of construction
drawings being delivered after the intended completion
date. There were many other less expansive changes to the
project, such as ACI’s fickleness on which equipment it
would acquire by itself. ACI even failed to im-
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mediately deliver the project site to CECON so that
CECON may commence excavation, the most basic task in
setting up a structure’s foundation. ACI also failed to
produce definite instruments articulating its agreement
with CECON, the final contract documents.
With the withering of the premises upon which a lump
sum, fixed price arrangement would have been founded,
such an arrangement must have certainly been negated:
[T]he contract is fixed and lump sum when it was tendered
and contracted as a design and construct package. The
contract scope and character significantly changed when
the design was taken over by the Respondent. At the time
of the negotiation and agreement of the amount of Php1.54
billion, there were no final plans for the change to
structural steel, and all the [mechanical, electrical and
plumbing] drawings were all schematics.
[I]t is apparent to the Tribunal that the quantity and
materials at the time of the P1.54B agreement are
significantly different from the original plans to the finally
implemented plans. The price increases in the steel
products and cement were established to have already
increased by 11.52% and by P5.00 per bag respectively by
January 21, 2003. The Tribunal finds agreement with the
Claimant that it is fairer to award the price increase.
....
It should also be mentioned that Respondent had
changed the scope and character of the agreement. First,
there were major changes in the plans and specifications.
Originally, the contract was for design and construct. The
design was deleted from the scope of the Claimant. It was
changed to a straight construction contract. As a straight
construction contract, there were no final plans to speak of
at the time of the instructions to change. Then there was a
verbal change to structural steel frame. No plans were
available upon this instruction to change. Next, the
[mechanical, electrical and plumbing] plans were all
schematics. It is therefore expected that changes
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of plans are forthcoming, and that changes in costs would
follow . . .
....
It has been established that the original tender, request
for proposal and award is for a design and construct
contract. The contract documents are therefore associated
for said system of construction. When Respondent decided
to change and take over the design, such as the change from
concrete to structural steel framing, “takeout” equipment
from the contract and modify the [mechanical, electrical
and plumbing w]orks, the original scope of work had been
drastically changed. To tie down the Claimant to the unit
prices for the proposal for a different scope of work would be
grossly unfair. This Tribunal will hold that unit price
adjustment could be allowed but only for change orders that
were not in the original scope of work, such as the change
order from concrete to structural framing, the [mechanical,
electrical and plumbing w]orks, [schematic drawings to
construction drawings] and the Miscellaneous Change
Order Works.151
V.B
Contrary to ACI’s oft-repeated argument,152 the CIAC
Arbitral Tribunal correctly found that ACI had gained no
solace in statutory provisions on the immutability of
prices stipulated between a contractor and a landowner.
Article 1724 of the Civil Code reads:
The contractor who undertakes to build a structure or
any other work for a stipulated price, in conformity with
plans and specifications agreed upon with the landowner,
can neither withdraw from the contract nor demand an
increase in the price on account of the higher cost of labor
or materials, save when there has been a change in the
plans and specifications, provided: 1724. Article
_______________
151 Rollo, pp. 3812-3813 and 3884.
152 Id., at pp. 6483-6487.
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Such change has been authorized by the proprietor in
writing; and (1)
The additional price to be paid to the contractor has
been determined in writing by both parties. (2)
Article 1724 demands two (2) requisites in order that a
price may become immutable: first, there must be an actual,
stipulated price; and second, plans and specifications must
have definitely been agreed upon.
 Neither requisite avails in this case. Yet again, ACI is
begging the question. It is precisely the crux of the
controversy that no price has been set. Article 1724 does not
work to entrench a disputed price and make it sacrosanct.
Moreover, it was ACI which thrust itself upon a situation
where no plans and specifications were immediately agreed
upon and from which no deviation could be made. It was
ACI, not CECON, which made, revised, and deviated from
designs and specifications.
V.C
The CIAC Arbitral Tribunal also merely held ACI to
account for its voluntarily admitted adjustments. The CIAC
Rules of Procedure permit deviations from technical rules
on evidence, including those on admissions. Still, common
sense dictates that the principle that “[t]he act, declaration
or omission of a party as to a relevant fact may be given in
evidence against him”153 must equally hold true in
administrative or quasi-judicial proceedings as they do in
court actions. Certainly, each must be held to account for
his or her own voluntary declarations. It would have been
plainly absurd to disregard ACI’s reneging on its own
admissions:
_______________
153 RULES OF COURT, Rule 130, Sec. 26.
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Respondent has agreed to the price increase in structural
steel and after some negotiation paid the agreed amount.
Respondent also agreed to the price increase in the
reinforcing bars and instructed the Claimant to bill it
accordingly. To the Tribunal, such action is an
acknowledgment of the price increase. Respondent can
make the case that said agreement is conditional, i.e., the
Complaint must be withdrawn. To the Tribunal, the
conditionality falls both ways. The Claimant has as much
interest to agree to a negotiated price increase so that it can
collect payments for the claims. The conditionalities do not
change the basis for the quantity and the amount. The
process of the negotiation has arrived at the price difference
and quantities. The Tribunal finds the process in arriving
at the Joint Manifestation, a fair determination of the unit
price increase. This holding will render the discussions on
Exhibit JJJJ, and the demand of the burden of proof of the
Respondent superfluous.154
This absurdity is so patent that the Court of Appeals
was still compelled to uphold awards premised on ACI’s
admissions, even as it reversed the CIAC Arbitral
Tribunal’s decision on the primordial issue of the
characterization of the contractual arrangement between
CECON and ACI:
As stated, the contract between [ACI] and CECON has
not been amended or revised. The Arbitral Tribunal had no
power to amend the contract to provide that there be
allowed price and/or cost adjustment removing the express
stipulation that the Project is for a lump sum or fixed price
consideration. Accordingly, this Court removes the award
for additional costs spent by CECON on cement and
formworks due to price increases or removing the award for
these items in the total amount of P5,598,338.20. Since
CECON is not entitled to its claim for price increase, it is
likewise not entitled to the award of the interest rate of
6% per annum.
_______________
154 Rollo, p. 3812.
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With regard however to the additional costs for the
rebars due to price increases, this Court finds that CECON
is entitled to the amount of P10,266,628.00 representing
the additional costs spent by CECON for rebars due to price
increases, notwithstanding the Arbitral Tribunal’s excess of
jurisdiction in amending the contract between the parties
because [ACI] and CECON had in fact agreed that CECON
was entitled to such an amount and that [ACI] would pay
the same. This agreement was made in the parties’ Joint
Manifestation of Compliance dated March 30, 2004 which
they filed with the Arbitral Tribunal (“Joint
Manifestation”).155
No extraordinary technical or legal proficiency is
required to see that it would be the height of absurdity and
injustice to insist on the payment of an amount the
consideration of which has been reduced to a distant
memory. ACI’s invocation of Article 1724 is useless as the
premises for its application are absent. ACI’s position is an
invitation for this Court to lend its imprimatur to unjust
enrichment enabled by the gradual wilting of what should
have been a reliable contractual relation. Basic decency
impels this Court to not give in to ACI’s advances and
instead sustain the CIAC Arbitral Tribunal’s conclusion
that the amount due to CECON has become susceptible to
reasonable adjustment.
VI
The Arbitral Tribunal’s award must be reinstated.
VI.A
With the undoing of the foundation for the Court of
Appeal’s fallacious, circular reasoning, its monetary awards
must also necessarily give way to the reinstatement of the
CIAC Arbitral Tribunal’s awards.
_______________
155 Id., at pp. 38-39.
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The inevitable changes borne by ACI’s own trifling
actions justify, as a consequence, compensation for cost
adjustments and the ensuing change orders, additional
overhead costs for the period of extension, extended
coverage for contractor’s all risk insurance, and attendance
fees for auxiliary services to subcontractors whose functions
were also necessarily prolonged. ACI’s frivolity on the
acquisition of elevators, escalators, chillers, generator sets,
indoor substations, cooling towers, pumps, and tanks also
vindicates compensation for the works that remained under
CECON’s account. ACI’s authorship of the causes of delay
supports time extensions favoring CECON and, conversely,
discredits liquidated damages benefitting ACI.
This Court upholds the Arbitral Tribunal’s awards on
each of the items due to CECON, as well as on its findings
relating to CECON’s countervailing liabilities.
In fulfilling its task, the CIAC Arbitral Tribunal was
equipped with its technical competence, adhered to the
rigors demanded by the CIAC Rules of Procedure, and was
endowed with the experience of exclusively presiding over
19 months of arbitral proceedings, examining object and
documentary evidence, and probing witnesses.
VI.B
Within the CIAC Arbitral Tribunal’s technical
competence was its reference to prevailing industry
practices, a much-bewailed point by ACI.156 This reference
was made not only desirable but even necessary by the
absence of definitive governing instruments. Moreover, this
reference was made feasible by the CIAC Arbitral
Tribunal’s inherent expertise in the construction industry.
This reference was not only borne by practical
contingencies and buttressed by recognized proficiency, it
was also
_______________
156 Id., at pp. 5894-5895.
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sanctioned by the statutory framework of contractual
interpretation within which the CIAC Arbitral Tribunal
operated. Thus, the following principles governed the
interpretation of the change orders, requests, and other
communications, which had effectively been surrogates of a
single definite instrument executed by the parties.
From the Civil Code:
Words which may have different significations shall be
understood in that which is most in keeping with the
nature and object of the contract. 1375. Article
The usage or custom of the place shall be borne in mind in
the interpretation of the ambiguities of a contract, and shall
fill the omission of stipulations which are ordinarily
established. 1376. Article
From the Revised Rules on Evidence, the following have
been made applicable even outside regular litigation by
Article 1379 of the Civil Code:
14. SectionPeculiar signification of terms.—The terms of
a writing are presumed to have been used in their primary
and general acceptation, but evidence is admissible to show
that they have a local, technical, or otherwise peculiar
signification, and were so used and understood in the
particular instance, in which case the agreement must be
construed accordingly.
....
19. SectionInterpretation according to usage.—An
instrument may be construed according to usage, in order
to determine its true character.157(Emphasis supplied)
 Equally availing is the following principle. This is
especially true of the remuneration due to CECON,
considering
_______________
157 RULES OF COURT, Rule 130, Secs. 14 and 19.
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that stipulations for remuneration are devised for the
benefit of the person rendering the service:
17. SectionOf two constructions, which preferred.—When
the terms of an agreement have been intended in a different
sense by the different parties to it, that sense is to prevail
against either party in which he supposed the other
understood it, and when different constructions of a
provision are otherwise equally proper, that is to be taken
which is the most favorable to the party in whose favor the
provision was made.158
VI.C
In appraising the CIAC Arbitral Tribunal’s awards, it is
not the province of the present Rule 45 Petition to supplant
this Court’s wisdom for the inherent technical competence
of and the insights drawn by the CIAC Arbitral Tribunal
throughout the protracted proceedings before it. The CIAC
Arbitral Tribunal perused each of the parties’ voluminous
pieces of evidence.159 Its members personally heard,
observed, tested, and propounded questions to each of the
witnesses. Having been constituted solely and precisely for
the purpose of resolving the dispute between ACI and
CECON for 19 months, the CIAC Arbitral Tribunal devoted
itself to no other task than resolving that controversy. This
Court has the benefit neither of the CIAC Arbitral
Tribunal’s technical competence nor of its irreplaceable
experience of hearing the case, scrutinizing every piece of
evidence, and probing the witnesses.
True, the inhibition that impels this Court admits of
exceptions enabling it to embark on its own factual inquiry.
Yet, none of these exceptions, which are all anchored on
considera-
_______________
158 Id., Sec. 17.
159 Rollo, p. 3771. Exhibits were so voluminous,
markings such as “BBBBB” and “MMMMM” were
necessary.
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tions of the CIAC Arbitral Tribunal’s integrity and not
merely on mistake, doubt, or conflict, is availing.
This Court finds no basis for casting aspersions on the
integrity of the CIAC Arbitral Tribunal. There does not
appear to have been an undisclosed disqualification for any
of its three (3) members or proof of any prejudicial
misdemeanor. There is nothing to sustain an allegation
that the parties’ voluntarily selected arbitrators were
corrupt, fraudulent, manifestly partial, or otherwise
abusive. From all indications, it appears that the CIAC
Arbitral Tribunal extended every possible opportunity for
each of the parties to not only plead their case but also to
arrive at a mutually beneficial settlement. This Court has
ruled, precisely, that the arbitrators acted in keeping with
their lawful competencies. This enabled them to come up
with an otherwise definite and reliable award on the
controversy before it.
Inventive, hair-splitting recitals of the supposed
imperfections in the CIAC Arbitral Tribunal’s execution of
its tasks will not compel this Court to supplant itself as a
fact-finding, technical expert.
ACI’s refutations on each of the specific items claimed by
CECON and its counterclaims of sums call for the point by
point appraisal of work, progress, defects and rectifications,
and delays and their causes. They are, in truth, invitations
for this Court to engage in its own audit of works and
corresponding financial consequences. In the alternative, its
refutations insist on the application of rates, schedules, and
other stipulations in the same tender documents, copies of
which ACI never adduced and the efficacy of which this
Court has previously discussed to be, at best, doubtful.
This Court now rectifies the error made by the Court of
Appeals. By this rectification, this Court does not open the
doors to an inordinate and overzealous display of this
Court’s authority as a final arbiter.
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Without a showing of any of the exceptional
circumstances justifying factual review, it is neither this
Court’s business nor in this Court’s competence to
pontificate on technical matters. These include things such
as fluctuations in prices of materials from 2002 to 2004, the
architectural and engineering consequences — with their
ensuing financial effects — of shifting from reinforced
concrete to structural steel, the feasibility of rectification
works for defective installations and fixtures, the viability
of a given schedule of rates as against another, the audit of
changes for every schematic drawing as revised by
construction drawings, the proper mechanism for
examining discolored and mismatched tiles, the minutiae of
installing G.I. sheets and sealing cracks with epoxy
sealants, or even unpaid sums for garbage collection.
The CIAC Arbitral Tribunal acted in keeping with the
law, its competence, and the adduced evidence; thus, this
Court upholds and reinstates the CIAC Arbitral Tribunal’s
monetary awards.
VII
It does not escape this Court’s attention that this
controversy has dragged on for more than 13 years since
CECON initially sought to avail of arbitration.
The CIAC Arbitral Tribunal noted that ACI consumed a
total of 840 days filing several motions and manifestations,
including at least eight (8) posturings at pursuing
settlement.160 It added, however, that ACI repeatedly failed
to respond to CECON’s claims during meetings thereby
constraining CECON to file motions to proceed after
repeatedly being dangled hope of an early resolution.161 It
appeared that ACI was more interested in buying time than
in effecting a consummate voluntary settlement.
_______________
 160 Id., at p. 4027.
161 Id., at pp. 4027-4028.
249
VOL. 836, AUGUST 9, 2017 249
CE Construction Corporation vs. Araneta Center,
Inc.
The CIAC Arbitral Tribunal’s October 25, 2006 Decision
should have long brought this matter to an end. This Court
does not fault ACI for availing of remedies. Yet, this Court
also notes that even in proceedings outside of the CIAC
Arbitral Tribunal, ACI seems to not have been sufficiently
conscientious of time.
In this Court alone, ACI sought extensions to file its
Comment no less than five (5) times.162 It sought several
other extensions in the filing of its Memorandum.163
It also does not escape this Court’s attention that while
ACI’s arguments have perennially pleaded the supposed
primacy and immutability of stipulations originally
articulated in the tender documents, it never bothered to
annex any of these documents either to its Comment or to
its Memorandum. Without these and other supporting
materials, this Court is left in the uneasy predicament of
merely relying on ACI’s self-stated assertions and without
means of verifying even the syntax of its citations.
While presumptions of good faith may be indulged, the
repercussions of ACI’s vacillation cannot be denied.
Even if this Court were to ignore the delays borne by
ACI’s procedural posturing, this Court is compelled to
hearken to ACI’s original faults. These are, after all, what
begot these proceedings. These are the same original faults
which so exasperated CECON; it was left with no recourse
but to seek the intervention of CIAC.
These faults began as soon as bidders responded to ACI’s
invitation. In CECON’s case, its communicated time for the
validity of its offer lapsed without confirmation from ACI.
ACI only verbally responded and only after CECON’s
communicated timeframe. It told CECON to commence
excavation works but failed to completely deliver the project
site until
_______________
162 Id., at p. 6127.
163 Id., at p. 6656.
250
250 SUPREME COURT REPORTS
ANNOTATED
CE Construction Corporation vs. Araneta Center,
Inc.
five (5) months later. It engaged in protracted negotiations,
never confirming acceptance until the tenth month, after
bidders had submitted their offers. By then, ACI’s supposed
acceptance could not even identify CECON’s most recent
quoted price. It undertook to process and deliver formal
documents, yet this controversy already reached this Court
and not a single page of those documents has seen the light
of day. It has repeatedly added and taken from CECON’s
scope of works but vigorously opposed adjustments that
should have at least been given reasonable consideration,
only to admit and partially stipulate on them. In taking
upon itself the task of designing, it took its time in
delivering as many as 1,675 construction drawings to
CECON, more than 600 of which were not delivered until
well after the project’s intended completion date.
 This Court commenced its discussion by underscoring Legal interest at the rate of six percent (6%) per
that arbitration primarily serves the need of expeditious annum is imposed on the award from the finality of this
dispute resolution. This interest takes on an even greater Decision until its full satisfaction.
urgency in the context of construction projects and the Costs against respondent.
national interest so intimately tied with them. ACI’s actions SO ORDERED.
have so bogged down its contractor. Nearing 13 years after Carpio (Chairperson), Peralta, Mendoza andMartires,
the Gateway Mall’s completion, its contractor has yet to be JJ., concur.
fully and properly compensated. Not only have ACI’s
actions begotten this dispute, they have hyperextended Petition granted, judgment and amended decision
arbitration proceedings and dragged courts into the reversed and set aside. That of CIAC Arbitral Tribunal
controversy. The delays have virtually bastardized the reinstated.
hopes at expeditious and effective dispute resolution which
Note.—The jurisdiction of the Construction Industry
are supposedly the hallmarks of arbitration proceedings.
Arbitration Commission (CIAC) is derived from law. It is
For these, in addition to sustaining each of the awards
broad enough to cover any dispute arising from, or
due to CECON arising from the facets of the project, this
connected with construction contracts, whether these
Court also sustains the CIAC Arbitral Tribunal’s award to
involve mere contractual money claims or execution of the
CECON of arbitration costs. Further, this Court imposes
works. (Philippine Race Horse Trainer’s Association, Inc. vs.
upon respondent Araneta Corporation, Inc. the burden of
Piedras Negras Construction and Development Corporation,
bearing the costs of what have mutated into a full-fledged
775 SCRA 631 [2015])
litigation before this Court and the Court of Appeals.
——o0o——
251 © Copyright 2019 Central Book Supply, Inc. All rights
VOL. 836, AUGUST 9, 2017 251 reserved.
CE Construction Corporation vs. Araneta Center,
Inc.
WHEREFORE, the Petition is GRANTED. The
assailed April 28, 2008 Decision and July 1, 2010 Amended
Decision of the Court of Appeals in C.A.-G.R. S.P. No. 96834
are REVERSED and SET ASIDE. The Construction
Industry Arbitration Commission Arbitral Tribunal’s
October 25, 2006 Decision in CIAC Case No. 01-2004
is REINSTATED.
 December 7, 2016. G.R. No. 192948.*
B.F. CORPORATION and HONORIO PINEDA,
petitioners, vs. FORM-EZE SYSTEMS, INC., respondent.
Construction Contracts; Cases in which Factual
Finding of Construction Arbitrators May be Reviewed by the
Court.—Factual findings of construction arbitrators may be
reviewed by the Court in cases where: 1) the award was
procured by corruption, fraud or other undue means; (2)
there was evident partiality or corruption of the arbitrators
or any of them; (3) the arbitrators were guilty of misconduct
in refusing to hear evidence pertinent and material to the
controversy; (4) one or more of the arbitrators were
disqualified to act as such under Section nine of Republic
Act (R.A.) No. 876 and willfully refrained from disclosing
such disqualifications or of any other misbehavior by which
the rights of any party have been materially prejudiced; (5)
the arbitrators exceeded their powers, or so imperfectly
executed them, that a mutual, final and definite award
upon the subject matter submitted to them was not made;
(6) when there is a very clear showing of grave abuse of
discretion resulting in lack or loss of jurisdiction as when a
party was deprived of a fair opportunity to present its
position before the Arbitral Tribunal or when an award is
obtained through fraud or the corruption of arbitrators; (7)
when the findings of the Court of Appeals are contrary to
those of the CIAC, and (8) when a party is deprived of
administrative due process.
Civil Law; Unjust Enrichment; The principle of unjust
enrichment essentially contemplates payment when there is
no duty to pay, and the person who receives the payment has
no right to receive it.—To award the full contract price to
Form-Eze in Contract No. 1 is tantamount to unjust
enrichment. There is unjust enrichment under Article 22 of
the Civil Code when (1) a person is unjustly benefited, and
(2) such benefit is derived at the expense of or with
damages to another. The principle of unjust enrichment
essentially contemplates payment when there is no duty to
pay, and the person who receives the payment has no right
to receive it. By requiring BFC to pay the full contract price
when it only supplied deckforms which covered
_______________
* THIRD DIVISION.
156
156 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
only 5,149.85 contact square meters of formworks, the
CIAC Arbitral Tribunal is essentially unjustly giving
unwarranted benefit to Form-Eze by allowing it to earn
more than it legally and contractually deserved. It is also
worth mentioning that Form-Eze had in fact only been
claiming for the contact area where its equipment was used.
Same; Contracts; Reformation of Contracts;
Reformation is a remedy in equity, whereby a written
instrument is made or construed so as to express or conform
to the real intention of the parties, where some error or
mistake has been committed.—An action for reform a
contract is grounded on Article 1359 of the New Civil Code
which provides: ARTICLE 1359. When, there having been a
meeting of the minds of the parties to a contract, their true
intention is not expressed in the instrument purporting to
embody the agreement, by reason of mistake, fraud,
inequitable conduct or accident, one of the parties may ask
for the reformation of the instrument to the end that such
true intention may be expressed. x x x x Reformation is a
remedy in equity, whereby a written instrument is made or
construed so as to express or conform to the real intention
of the parties, where some error or mistake has been
committed. In granting reformation, the remedy in equity is
not making a new contract for the parties, but establishing
and perpetuating the real contract between the parties
which, under the technical rules of law, could not be
enforced but for such reformation. In order that an action
for reformation of instrument may prosper, the following
requisites must concur: (1) there must have been a meeting
of the minds of the parties to the contract; (2) the
instrument does not express the true intention of the
parties; and (3) the failure of the instrument to express the
true intention of the parties is due to mistake, fraud,
inequitable conduct or accident.
Construction Industry Arbitration Commission;
Jurisdiction; Section 4 of Executive Order (EO) No. 1008
vests jurisdiction on Construction Industry Arbitration
Commission (CIAC) over disputes arising from, or connected
with, contracts entered into by parties involved in
construction in the Philippines, whether the dispute arises
before or after the
157
VOL. 813, DECEMBER 7, 2016 157
B.F. Corporation vs. Form-Eze Systems, Inc.
completion of the contract, or after the abandonment or
breach thereof.—Section 4 of Executive Order No. 1008
vests jurisdiction on CIAC over disputes disputes arising
from, or connected with, contracts entered into by parties
involved in construction in the Philippines, whether the
dispute arises before or after the completion of the contract,
or after the abandonment or breach thereof. Moreover, the
party involved must agree to submit to voluntary
arbitration. In other words, anyone who is not a party to
the contract in his personal capacity is not subject to the
jurisdiction of the CIAC. In this case, Pineda signed the
challenged contracts in his capacity as President of BFC.
There is no indication that he voluntarily submitted himself
as a party to the arbitration case. In fact, he has been
consistently contesting his inclusion as a respondent in the
CIAC proceedings. CIAC however considered Pineda as a
joint tortfeasor, thus justifying his joinder as a codefendant.
Attorney’s Fees; Under Article 2208 of the Civil Code,
attorney’s fees may, among others, be recovered where
defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiff’s plainly valid, just and demandable
claim.—Under Article 2208 of the Civil Code, attorney’s
fees may, among others, be recovered where defendant
acted in gross and evident bad faith in refusing to satisfy
the plaintiff’s plainly valid, just and demandable claim. We
observe that in filing the complaint against BFC, Form-Eze
was merely seeking payment for its service under the
contract. BFC had admitted to its obligation. The problem
lies only on the amount to be paid. This is not tantamount
to bad faith.
PETITION for review on certiorari of the decision and
resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Castelo & Associates Law Office for petitioners.
Mendoza, Arzaga-Mendoza for respondent.
PEREZ,J.:
 This petition for review assails the 15 January 2010 agreements were executed by the BFC, represented by its
Decision1 and 13 July 2010 Resolution2 of the Court of President Pineda, and Form-Eze, represented by its
Appeals in President, James W. Franklin. These contracts and their
_______________ salient provisions are provided in the following table:

1 Rollo (Vol. I), pp. 131-151; penned by Associate Justice _______________

Marlene Gonzales-Sison, with Associate Justices Fernanda
Lampas-Peralta and Florito S. Macalino, concurring. 2 Id., at pp. 153-157.
3 Id., at pp. 1596-1600.
4 Id., at p. 161.

158
158 SUPREME COURT REPORTS
ANNOTATED 159
B.F. Corporation vs. Form-Eze Systems, Inc. VOL. 813, DECEMBER 7, 2016 159
C.A.-G.R. S.P. No. 102007 which affirmed the Final Award B.F. Corporation vs. Form-Eze Systems, Inc.
rendered by the Construction Industry Arbitration
Commission (CIAC) Arbitral Tribunal on 7 December 2007.

Factual Antecedents
160
Petitioner B.F. Corporation (BFC) is a corporation 160 SUPREME COURT REPORTS
engaged in general engineering and civil works ANNOTATED
construction. Petitioner Honorio H. Pineda (Pineda) is the B.F. Corporation vs. Form-Eze Systems, Inc.
President of BFC. Respondent Form-Eze Systems, Inc.
(Form-Eze) is a corporation engaged in highway and street
construction. _______________
On 29 August 2006, SM Prime Holdings, Inc. awarded
the contract for general construction of the SM City- 5 Id., at p. 162.
Marikina mall (the Project) to BFC whereby the latter
undertook to supply materials, labor, tools, equipment and
supervision for the complete construction of the Project.3 In
turn, BFC engaged Form-Eze for the lease of formwork 161
system and related equipment for and needed by the VOL. 813, DECEMBER 7, 2016 161
Project. Accordingly, five (5) contracts and two (2) letter-
 B.F. Corporation vs. Form-Eze Systems, Inc. _______________

8 Id., at p. 165
_______________ 9 Id., at p. 166.
10 Id., at p. 167.
6 Id., at p. 163.

165
162 VOL. 813, DECEMBER 7, 2016 165
162 SUPREME COURT REPORTS B.F. Corporation vs. Form-Eze Systems, Inc.
ANNOTATED On 30 March 2007, Form-Eze filed a Request for
B.F. Corporation vs. Form-Eze Systems, Inc. Arbitration11 before the CIAC. In its Complaint, Form-Eze
alleged that BFC has an unpaid obligation amounting to
P9,189,024.58; that BFC wanted to renegotiate the
equipment leases; and that it was not complying with the
contractual and supplemental agreements in effect. Form-
163 Eze prayed for the following relief:
VOL. 813, DECEMBER 7, 2016 163 1. [For BFC] to pay the current monthly equipment rentals;
2. Provisions made to guarantee the earned monthly
B.F. Corporation vs. Form-Eze Systems, Inc.
equipment leased amounts are paid timely;
3. To legislate provisions to ensure the lease contracts are
not breached during the construction of the SM
_______________ Marikina Mall;
4. Provisions made to guarantee the performance of [BFC]
7 Id., at p. 164.
for the manufacturing of the shoring equipment
purchased by Form-Eze from BFC;
5. Provisions made to guarantee the return of all Form-Eze
164 equipment when the concrete structure is completed and
164 SUPREME COURT REPORTS all lost and damaged equipment has been paid for by
[BFC]; and
ANNOTATED
6. All cost related to Arbitration.12
B.F. Corporation vs. Form-Eze Systems, Inc.
 In its Amended Answer with Counterclaim, BFC sought
for reformation of Contract #1 to incorporate a provision
that BFC shall deduct from said billing the cost of labor
supplied by it for the fabrication and assembly of the
forming system and for the stripping, cleaning, resetting
thereof at the rate of P60.00 per man-hour. BFC also
demanded the refund of P5,773,440.00 as expenses for the
manufacture of additional hardware to complete the 7,000
square meters of formwork
_______________
11 Id., at p. 158.
12 Id., at p. 160.
166
166 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
required in Contract #1. BFC explained that Form-Eze had
only furnished 4,682.4 square meters of formwork.13
The CIAC appointed a 3-member Arbitral Tribunal
(CIAC Arbitral Tribunal), composed of Atty. Custodio O.
Parlade, Atty. Alfredo F. Tadiar and Engineer Romeo C.
David, to adjudicate Form-Eze’s claims.
Under the Terms of Reference, the parties made the
following admissions:
1. The existence of five contracts, a memorandum of
agreement and a supplemental contract.
2. BFC renegotiated Contract #1 but it did not result in a
separate written contract.
3. Under Contract #1, BFC is willing and ready to pay
Form-Eze the amount of P3,515,003.59, which amount
shall be deducted from the amount of the latter’s claim.
4. Under Contract #2 BFC is willing and ready to pay
Form-Eze the amount of P675,788.97, which amount
shall be deducted from the amount of the latter’s claim.
5. BFC admits that it has the obligation to return to Form-
Eze equipment furnished them under Contracts #1, 2,
and 3, and all heavy-duty galvanized scaffold frames and
related accessories, heavy-duty galvanized x-bracing and
adjustable U-heads and base plates fabricated and
manufactured by BFC under Contracts #4, 5 and letters
dated 5 January 2007.14
The claims15 of the parties are summarized, as follows:
_______________
13 Id., at pp. 195-196.
14 Id., at pp. 250-251.
15 Id., at pp. 253-254.
167
VOL. 813, DECEMBER 7, 2016 167
B.F. Corporation vs. Form-Eze Systems, Inc.
The total arbitration fees amounted to P616,393.73.
CIAC Arbitral Tribunal was tasked to resolve the
following issues, to wit:
1. Is Claimant entitled to its total claim of P34,284,996.41
representing the alleged arrear on equipment rental
under Contract #1?
168
168 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
2. Is Claimant entitled to its claim of P5,624,211.03
representing the alleged arrears under Contract #2?
3. Is Claimant entitled to its claim of P3,230,500.00
representing the alleged arrears under Contract #3?
4. Is Claimant entitled to its claim of P1,374,408.00
representing the rental fees under Letter dated 5
January 2007?
5. Is Claimant entitled to its claim for the reformation of
the subject Contracts to include the following:
a. Contract #1 – Provisions to guarantee the earned
monthly equipment leased amounts are paid
timely;
b. Contract #1 – Provision to ensure that the lease
contracts are not breached during the construction
of the SM Marikina Mall;
c. Contracts #4 and 5 – Provision to guarantee the
performance of [BFC] for the manufacturing of the
shoring equipment purchased by Form-Eze from
BF Corp.;
d. Contracts #1, 2, 3, 4 and 5 – Provision for [BFC] to
pay for the lost and damaged equipment furnished
them by the [Form-Eze]; and
e. Contract #1 – Provision in the Contract to include
the P75 per contact sq. m. for labor guarantee.
6. Is [BFC] #1 entitled to the reformation of Contract #1 to
include a provision that [BFC] #1 shall deduct from
[Form-Eze’s] billing the cost of labor, helmet and
expenses for x-bracing supplied by it for the
assembly of the form system amounting to P812,791.09,
to deduct from the billing under Contract #2 the cost of
labor for the stripping thereof, the costs of petroleum, oil
and lubricant and helmet of the said laborers up to the
end of the contract in the sum of P1,391,086.02 and from
the billing under Contract #3, the cost of labor for the
installation and forming of the built up column forms
from
169
VOL. 813, DECEMBER 7, 2016 169
B.F. Corporation vs. Form-Eze Systems, Inc.
June 19, 2007 up to the end of the project in the sum of
P273,240.00?16
7. Is it proper to include Mr. Honorio Pineda as Respondent
No. 2?
8. Does the Arbitral Tribunal have the jurisdiction to award
claims that accrued after the filing of the Request for
Arbitration or does the Claimant have a cause of action
for claims that accrued during the same period?
9. Who between the parties is entitled to attorney’s fees?
10. Who between the parties should bear the arbitration
costs?17
Final Award by Ciac
On 7 December 2007, the CIAC Arbitral Tribunal
rendered a Final Award in favor of Form-Eze. The
dispositive portion reads:
 WHEREFORE, award is hereby made in favor of
Claimant and against [BFC], ordering the latter to pay the
former the following amounts:
16 The CIAC Arbitral Tribunal corrected Issue No. 6 in
the TOR upon BFC’s motion.
17 Rollo (Vol. I), pp. 252-253.
170
170 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
On Letter Agreement of January 5, 2008 to December 8,
2007
P560,000.00
IN SUM THE FOLLOWING AWARDS ARE MADE:
The Tribunal further awards in favor of [Form-Eze] and
against [BFC] and [Pineda] who are ordered, jointly and
severally to pay [Form Eze] P300,00.00 as attorney’s fees,
and to indemnify [Form-Eze’s] cost of arbitration paid to
CIAC.
The Tribunal likewise disposes of the remaining issues
as follows:
a) The claims under Issue Nos. 5 and 6 for reformation
of Contracts No. 1, 2, 3, 4 and 5 are denied for lack
of merit.
b) The inclusion of Mr. Honorio Pineda in the
Complaint as additional respondent is proper.
c) The Tribunal has jurisdiction over the claims of [Form-
Eze] and finds that the Complaint
171
VOL. 813, DECEMBER 7, 2016 171
B.F. Corporation vs. Form-Eze Systems, Inc.
states a cause of action as to claims that accrued
after the filing of the Complaint.
d) All other claims and counterclaims submitted
pursuant to the definition of issues in the Terms of
Reference, not otherwise disposed of or resolved
above, are dismissed for lack of merit. All claims
and counterclaims peripherally discussed in these
proceedings which are outside the scope of the
definition of issues in the Terms of Reference are
likewise outside the scope of this Final Award.
e) The net award in favor of [Form-Eze] amounting to
P28,517,251.67 shall earn interest at the rate of
6% per annum from the date of this Final Award,
and 12% from the date the Final Award becomes
final and executory until the same is fully paid.18
BFC filed a Motion for Correction of the Final Award.
Form-Eze asserted that the calculations made on the total
quantity of deckforms supplied to be used under Contract
No. 1 is erroneous because the quantity of the accessories
that were delivered together with the loose truss chords and
assembled trusses that were backloaded were ignored in
the computation. BFC explained that the hardware
supplied must be assembled first into deckforms since what
is actually rented under Contract No. 1 are the deckforms,
and not the hardware, thus:
Evidently, in the computation thereof, the total quantity
of the accessories that were delivered together with the said
loose truss chords and assembled trusses, both of which are
shown in the same delivery receipts, and the total length of
the loose truss chords and assembled trusses that were
backloaded, were not considered and totally ignored.
_______________
18 Id., at pp. 2157-2159.
172
172 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
Needless to state, these accessories, such as joist and
beam hanger, just like the chords and the trusses, are
component and indispensable parts of a deckform without
which it can not be completely assembled to be used for the
purpose intended. In the case of a deckform 44 ft. in length,
it will need, for it to be completely assembled, 34 pieces of
joists and 68 pieces of beam hangers, as shown in the
herewith attached Annex “A” hereof.
Therefore, to form 87 completely assembled deckforms of
44 ft. in length out of/from the delivered chords and trusses,
it will require 2,958 pieces of joist and 5,916 pieces of beam
hangers.
However, as show in Exhibits “C-9(5),” “C-9(11),” “C-
9(15),” “C-9(18),” “C-9(21),” “C-9(25),” “C-9(27),” “C-9(30),”
and “C-9(31),” only 2,512 pieces of joists and in Exhibits “C-
9(8),” “C-9(15),” “C-9(16),” “C-9(18),” “C-9(21),” “C-9(27),” “C-
9(32),” “C-9(34),” “C-9(35),” “C-9(37),” “C-9(38),” “C-9(41),”
“C-9(35),” “C-9(38),” “C-9(40),” and “C-9(41),” only 3,626
pieces of beam hangers, the very documents on which this
Commission/Tribunal anchored its finding now sought to be
corrected, were actually delivered by the Claimant.
Accordingly, 87 deckforms of 44 ft. in length can not be
completely assembled from the delivered chords and trusses
because the quantity of the delivered accessories is
insufficient for the purpose. To be precise, only 53
deckforms of 44 ft. in length can be completely assembled
out of the total length of the chords and trusses with the
use of 1,802 pieces of joists and 3,604 pieces of beam
hangers (with an excess of 22 pieces of beam hangers, 710
pieces of joist and 2,720 ft. of chords and trusses) which are
sufficient to provide only 4,441.73 contact sq. m. of
formworks.
To therefore conclude that 87 deckforms of 44 ft. in
length can be completely assembled with the use of/out of
2,512 pieces of joists and 3,626 pieces of beam hangers, is
an evident miscalculation.
xxxx
173
VOL. 813, DECEMBER 7, 2016 173
B.F. Corporation vs. Form-Eze Systems, Inc.
Inasmuch as only 3,626 pieces of beam hangers were
actually delivered, which, when used with the delivered
quantity of joists and length of the delivered chords and
trusses in completely assembling 53 deckforms of 44 ft. in
length, is sufficient to provide only 4,441.73 contact sq. m.
of formworks, the minimum rental amount stipulated under
Contract No. 1 should correspondingly be reduced to only
Php17,989,006.50, less payment of Php7,700,000.00 =
Php10,829,006.50 as the net amount of rent due the
Claimant thereunder, as shown in the herewith attached
Annex “B” hereof.
On the same ground, the minimum contact amount
stipulated under Contract No. 2 should also be
proportionately reduced to Php3,997,557.00, less payment
of Php990,000.00 + cost of labor of Php60,000.00 =
Php2,947,557.00 as the net amount due the Claimant
thereunder.19
The CIAC Arbitral Tribunal denied the motion
prompting BFC to file a petition for review before the Court
of Appeals.
While the case was pending before the Court of Appeals,
Form-Eze filed a Motion with Leave to Direct BFC to return
pieces of equipment on 14 July 2009.
On 15 January 2010, the Court of Appeals dismissed the
petition for lack of merit. The Court of Appeals heavily
relied on factual findings of the CIAC Arbitral Tribunal.
The Petition
BFC filed a motion for reconsideration but it was denied
by the Court of Appeals in a Resolution dated 13 July 2010.
Hence, the present petition. BFC, in its Memorandum,
raised the following issues for our resolution:
_______________
19 Id. (Vol. II), pp. 2179-2181.
174
174 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
I.
Whether or not the Court of Appeals committed a
reversible error in affirming the CIAC’s ruling that BFC is
liable to pay rent to the [Form-Eze] under Contract Nos. 1,
2, and 3 even for portions where the latter’s supplied
formwork system were not used.
II.
Whether or not the Court of Appeals committed a
reversible error in affirming the CIAC’s conclusion that
[Form-Eze] was able to supply BFC with such quantity of
deckforms sufficient to provide the stipulated 7,000 contact
square meter of formworks as to entitle said [Form-Eze] to
the stipulated minimum contract rental price of
Php28,350,000.00 under Contract No. 1 and consequently to
Php6,300,000.00 under Contract No. 2, when, based on the
quantity of the delivered accessories, which are component
parts of deckform system, but which the CIAC totally
ignored, [Form-Eze] can only provide 4,441.73 contact
square meters of formworks that will entitle it to only
Php17,989,006.05 and Php3,997,557.00, respectively
thereunder.
III.
Whether or not the Court of Appeals committed
reversible error in affirming the CIAC’s ruling that [Form-
Eze] is entitled to two-thirds of the stipulated minimum
contract amount of Php3,230,500.00 or Php2,153,666.67
under Contract No. 3, considering that CIAC did not state
the factual and legal basis of said ruling and despite its
contrary factual finding that [Form-Eze] failed to supply
the minimum required columnforms.
IV.
 Whether or not the Court of Appeals committed a
reversible error in affirming the CIAC’s ruling against the
reformation of Contract No. 1 to include a provision that
BFC shall furnish the labor needed by [Form-Eze] in
assembling the deckforms and that it shall deduct
therefrom the agreed cost of labor at Php60.00 per man-
hour,
175
VOL. 813, DECEMBER 7, 2016 175
B.F. Corporation vs. Form-Eze Systems, Inc.
since it has been the true intention and real agreement of
the parties thereto.
V.
Whether or not the Court of Appeals committed a
reversible error in affirming the CIAC when it did not
deduct the following costs incurred by BFC from the
minimum contract amounts due:
(1) under Contract No. 1 for the cost of labor in
assembling the deckforms, the cost of helmets of
said laborers, and the expenses for x-bracing
supplied by BFC for the assembly of said forms in
the total amount of Php812,791.09;
(2) under Contract No. 2 for the cost of labor in the
stripping of said deckforms, the cost of petroleum,
oil and lubricant and helmet up to the end of the
contract in the sum total of Php1,391,086.02; and
(3) under Contract No. 3 for the cost of labor in
installing and forming the built up columnforms
from 25 June 2007 up to the end of the contract in
the sum total of Php273,240.00, when BFC is
legally entitled thereto.
VI.
Whether or not the Court of Appeals committed a
reversible error in affirming the CIAC in ordering BFC to
pay rental fees under letter dated 5 January 2007, covering
the period from 25 June 2007 to 17 December 2007 in the
sum total of Php560,000.00 at Php96,000.00 a month, when
the acquisition cost of the pieces of u-heads and plates
referred to therein is allegedly only Php96,000.00, and
there is evidence presented to show that these items were
purchased at Php96,000.00 and there is on evidence to
show the prevailing rate of rent for the same items.
VII.
Whether or not the Court of Appeals committed a
reversible error in affirming the CIAC in ruling that Re-
176
176 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
spondent Pineda can be held as corespondent (in the
arbitration case) when he is not a party to the contracts and
agreements involved in this case, as well as the arbitration
agreement, and he did not voluntarily submit himself to
arbitration in this case.
VIII.
Whether or not the Court of Appeals committed a
reversible error when it ruled that the attorney’s fees and
cost of arbitration shall be for the account of Petitioners,
considering that [Form-Eze] failed to supply the minimum
required equipment under the contracts and when the root
cause of the dispute is the imprecision of the language and
the incompleteness of the contracts and agreements, which
were prepared by the Respondents.20
BFC prays for a modification of the Final Award to read: the principle that the final award of CIAC may be still be
subject to judicial review, thus:
_______________ To begin, Executive Order No. (EO) 1008, which vests
upon the CIAC original and exclusive jurisdiction over
20 Id., at pp. 3368-3370. disputes arising from, or connected with, contracts entered
into by parties involved in construction in the Philippines,
plainly states that the arbitral award “shall be final and
inappealable except on questions of law which shall be
177 appealable to the Court.” Later, however, the Court, in
VOL. 813, DECEMBER 7, 2016 177 Revised Administrative Circular (RAC) No. 1-95, modified
B.F. Corporation vs. Form-Eze Systems, Inc. this rule, directing that the appeals from the arbitral award
of the CIAC be first brought to the CA on “questions of fact,
law or mixed questions of fact and law.” This amendment
The Court’s Ruling was eventually transposed into the present CIAC Revised
Rules which direct that “a petition for review from a final
The Final Award of CIAC award may be taken by any of the parties within fifteen (15)
is subject to review by the days from receipt thereof in accordance with the provisions
Court of Appeals. of Rule 43 of the Rules of Court.” Notably, the current
_______________ provision is in harmony with the Court’s pronouncement
that ‘‘despite statutory provisions making the decisions of
21 Id. (Vol. I), pp. 123-124. certain administrative agencies ‘final,’ the Court still takes
cognizance of petitions showing want of jurisdiction, grave
abuse of discretion, violation of due process, denial of
substantial justice or erroneous interpretation of the law”
178 and that, in particular, “voluntary arbitrators, by the
178 SUPREME COURT REPORTS nature of their functions, act in a quasi-judicial capacity,
ANNOTATED such that their decisions are within the scope of judicial
B.F. Corporation vs. Form-Eze Systems, Inc. review.”23
BFC first asserts that the Court of Appeals has the
power and the duty to review the factual findings made by _______________
CIAC and that the Court of Appeals should not be bound by
22 716 Phil. 788; 704 SCRA 332 (2013).
the factual findings of the construction arbitrators.
23 Id., at pp. 802-803; pp. 345-346.
The case of Asian Construction and Dev’t. Corp. v.
Sumitomo Corporation22 summarized the development of
 While factual findings are not within the purview of a
179 petition for review before this Court, we take exception in
VOL. 813, DECEMBER 7, 2016 179 this
B.F. Corporation vs. Form-Eze Systems, Inc. _______________
Factual findings of construction arbitrators may be
24 IBEX International, Inc. v. Government Service
reviewed by the Court in cases where: 1) the award was
Insurance System, 618 Phil. 304, 312-313; 603 SCRA 306,
procured by corruption, fraud or other undue means; (2)
315 (2009), citing Uniwide Sales Realty and Resources
there was evident partiality or corruption of the arbitrators
Corporation v. Titan-Ikeda Construction and Development
or any of them; (3) the arbitrators were guilty of misconduct
Corporation, 540 Phil. 350, 360-361; 511 SCRA 335, 345-
in refusing to hear evidence pertinent and material to the
346 (2006).
controversy; (4) one or more of the arbitrators were
disqualified to act as such under Section nine of Republic
Act (R.A.) No. 876 and willfully refrained from disclosing
such disqualifications or of any other misbehavior by which 180
the rights of any party have been materially prejudiced; (5) 180 SUPREME COURT REPORTS
the arbitrators exceeded their powers, or so imperfectly
ANNOTATED
executed them, that a mutual, final and definite award
upon the subject matter submitted to them was not made; B.F. Corporation vs. Form-Eze Systems, Inc.
(6) when there is a very clear showing of grave abuse of case on the ground of the appellate court’s refusal to delve
discretion resulting in lack or loss of jurisdiction as when a into the findings of facts of the CIAC Arbitral Tribunal.
party was deprived of a fair opportunity to present its Under Contract No. 1, Form-
position before the Arbitral Tribunal or when an award is Eze was not able to supply
obtained through fraud or the corruption of arbitrators; (7) BFC with deckforms suffi-
when the findings of the Court of Appeals are contrary to cient to provide 7,000 contact
those of the CIAC, and (8) when a party is deprived of square meter of formworks.
administrative due process.24 The CIAC Arbitral Tribunal conducted its own study
While this rule, which limits the scope of the review of and came up with the following findings:
CIAC findings, applies only to the Supreme Court, the The receipted hardware deliveries made by [Form-Eze]
Court of Appeals nonetheless is not precluded from show that the total length of loose truss chords delivered
reviewing findings of facts, it being a reviewer of facts. By was 11,912 lineal feet and the length of the truss chords
conveniently adopting the CIAC’s decision as its own and from the assembled trusses delivered was 2,052 lineal feet
refusing to delve into its factual findings, the Court of or a total available length of trusses of 13,964 lineal feet. By
Appeals had effectively turned a blind eye to the an iterative process of selection and elimination, 175 units
evidentiary facts which should have been the basis for an of 44’ long trusses could be assembled, equivalent to 87
equitable and just award. deckforms of 44 feet in length. The assembled 87-44’
deckforms can provide 7,268.58 square meters of contact BFC considerable labor and eliminate the use of BFC’s light
area, broken down as follows: duty scaffolding underneath and beam. By doing that it will
also speed up the forming operation and save BFC labor.
Contact Area The only light duty scaffolding that BFC will be installing
(%) is that under the girder which supports tremendous loading
during the stressing of the beams prior to it being stressed.
Interior & Near 4,156.89 sq.
= By forming the girder in this manner, [Form-Eze] is not
Column Slabs m. (57.19%)
involved in the tripping or resetting of the girder formwork.
Grid Beams (B- 740.37 sq. m.
= However, [Form-Eze] is has purchased and furnished
1) (10.19%)
Interior Beams 1,663.20 sq. considerable forming hardware and consumables (tie rods,
(B-2)
=
m. (22.88%) pvc sleeves, pvc cones, whaler clips and brackets and wing-
Grid Girders (G- 708.12 sq. m. nuts) which are being used on girders and the beams.
2)
=
(9.74%) [Form-Eze] will give the ownership of this equipment to
7,268.58 sq. BFC and BFC will buy all additional consumables and
Total = hardware (as needed) directly from Comer. In return,
m. (100%)
The resulting contact area of 7,628.58 sq. m. is 3.84% [Form-Eze] will include the contact square meters of
over the 7,000 sq. m. requirement of the contract. But the formwork in the girders in its billing for both the equipment
former figure includes the contact area of girders which lease and for the moving contract.” This letter-contract,
according to [petitioners] should not be included. As shown Exhibit C-12, binds [BFC] to pay Claimant for the girder
in ANNEX “A,” sheets 5 & 6 of 6, the contact area formworks contact area for both Contract No. 1 and
contributed by the girders is only 708.12 sq. m., and if this Contract No. 2.
is deducted from the computed total contact area, Petitioners argued that the formwork of the girder (or
large beam) is independent of the deckform system and so
should not be counted in favor of [Form-Eze]. The Tribunal
does not agree. How could the girder formwork be
181 considered independent from the deckform system when
VOL. 813, DECEMBER 7, 2016 181 both sides of the girder formworks are held stiff together by
B.F. Corporation vs. Form-Eze Systems, Inc. “tie rods, pvc sleeves (to make the tie rods reusable), pvc
the remaining available contact area would be 6,560.46 sq. cones, whaler clips and brackets and wing-nuts” supplied by
m. or 93.72%. The fact, however, is that the noninclusion of the [Form-Eze] and pressed between deckforms preparatory
the contact area provided by the girders would be a to concrete pouring? The girder cannot be considered
violation of the letter-contract dated 8 February 2007, structurally independent of the deck slabs because it is the
paragraph 9 of which provides that: “[Form-Eze] offered to requirement of design and the National Building Code and
install beam hangers and ledger angles in order to support its reference code the
the moment beam from column to column and thereby save

182
182 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
American Concrete Institute Code (ACI Code) that the
girders are to be poured monolithically with the slabs and
beams up to L/3 or 1/3 of the floor span (the point of
infection and location of the construction joint where the
bending moment is the least or zero), as is clearly shown on
the floor concrete pouring schedule plans.
Conclusion of Tribunal
In view of the above, it is the finding of the Arbitral
Tribunal that [Form-Eze] had been able to furnish the
amount of hardware that was sufficient to provide 7,000
contact square meters of formwork, all in accordance to
Contract No. 1. Thus, the remaining question to resolve is
the area of the project covered by the formwork equipment
in contact square meters.25
BFC accuses the CIAC of coming up with its own biased
computation of the contact area of the hardware supplied by
Form-Eze under Contract No. 1. According to BFC, Form-
Eze had furnished only 53 completely assembled deckforms
of 44 ft. in length which correspond to only 4,441.73 contact
square meters of formworks, while CIAC found that Form-
Eze had delivered truss chords equivalent to 87 deckforms
which can provide 7,268.58 contact square meters. BFC
maintains that Contract No. 1 is clear that the object is the
supply of the complete deckform system and not
unassembled hardware such as loose truss chords. BFC
adds that Form-Eze judicially admitted that it is only
claiming equipment rentals for the areas that its equipment
are being used. BFC reiterates that based on the provisions
of Contract No. 1 on the contemporaneous and subsequent
acts of the parties, as well as application of principles of
contract interpretation, the inclusion of loose truss chords
in the computation of the quantity of hardware supplied by
Form-Eze is an erroneous interpretation by CIAC. BFC also
claims that the CIAC wrongfully included the contact area
of girders in the computation of the sufficiency of
_______________
25 Rollo (Vol. I), pp. 2137-2139.
183
VOL. 813, DECEMBER 7, 2016 183
B.F. Corporation vs. Form-Eze Systems, Inc.
equipment supplied by Form-Eze. BFC contends that the
girders are not part of the deckforms contemplated in
Contract No. 1. BFC offers to compensate Form-Eze to the
extent that its supplied deckforms were used under the
principle of quantum meruit. BFC submits that 4,441.73
contact square meters or 63.45% of the 7,000 minimum
contact area required under Contract No. 1 is a reasonable
computation.
We reverse the finding of the CIAC on this point as it is
contrary to the evidence on record.
We agree with BFC that the CIAC should not have
included the unassembled truss chords in theoretically
forming deckforms. We subscribe to BFC’s submission that
the object of Contract No. 1 is the deckforms and not just
the hardware that make up the formwork. Contract No. 1,
in itself, is clear that “F-E has agreed to furnish all
hardware required in the formwork system for the poured
in place beam and slab concrete decks x x x.” In fact, the
equipment rental is only due and payable to Form-Eze
when the concrete is placed on the slab forms, which
provision is based on the premise that the hardware had
already been assembled into deckforms ready for concrete
pouring. Moreover, the Proposed SM Marikina Mall Project
Elevated Beam and Slab Formwork dated 7 December
2006, which document has been admitted by the parties in
the Term of Reference, provides that Form-Eze will furnish
sufficient deckforms to produce 1/2 floor each month on the
project.
BFC had also explained to our satisfaction that loose
truss chords alone could not be assembled into deckforms,
to wit:
To try to assemble truss chords alone into a deckform is
like taking three two-foot round pegs, trying to stand them
upright, then balancing twelve-inch round wooden slab on
top, and expect it to be a stool capable of supporting a
person. Joist, beam hangers and other component parts fix
the truss chords into place for the structural integrity of a
deckform. In the case of a deckform 44 ft. in length, it will
need, for it to be completely assem-
184
184 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
bled, 34 pieces of joists and 68 pieces of beam hangers as
illustrated in the Petitioner’s Motion for Correction of Final
Award.
Thus, assembling 87 deckforms of 44 ft. in length would
require 2,958 pieces of joist and 5,916 pieces of beam
hangers to assemble such 87-44-foot deckforms. However,
as show in the same documents that CIAC anchored its
theoretical findings, only 2,512 pieces of joists and only
3,626 pieces of beam hangers were actually delivered by
[Form- Eze].26
BFC’s computation of the total contact area covered by
the deckforms furnished by Form-Eze is backed by delivery
receipts of the joists and beam hangers while CIAC’s
computation is more theoretical than it is actual.
The inclusion of the additional contact area of the grid
girders in the calculation of the total contact area of the
equipment supplied by Form-Eze under Contract No. 1,
however, should be upheld. Paragraph 9 of the Letter dated
8 February 2007, which was also admitted by the parties,
clearly provides:
[Form-Eze] offered to install beam hangers and ledger
angles in order to support the moment beam fro column to
column and thereby save BFC considerable labor and
eliminate the use of BFC’s light duty scaffolding
underneath that beam. By doing that it will also speed up
the forming operation and save BFC labor. The only light
duty scaffolding that BFC will be installing is under the
girder which supports tremendous loading during the
stressing for the beams prior to it being stressed. By
forming the girder in this manner F-E is not involved in the
stripping or resetting of the girder formwork. However,
[Form-Eze] has purchased and furnished considerable
forming hardware and consumables (tie rods, pvc sleeves,
pvc cones, whaler clips and brackets and wing-nuts) which
are being used on the girders and the beams.
_______________
26 See BFC’s Memorandum, id.(Vol. II), p. 3382.
 185
VOL. 813, DECEMBER 7, 2016 185
B.F. Corporation vs. Form-Eze Systems, Inc.
[Form-Eze] will give ownership to this equipment to BFC
and BFC will buy all additional consumables and hardware
(as needed) directly from Comer. In return [Form-Eze] will
include the contact square meters of formwork in the
girders in its billing for both the equipment lease and for
the moving contract.27
BFC cannot claim that this provision does not refer to
Contract No. 1. Said provision mentions beam hangers and
ledger angles which are used to support the beams forming
the deckform and to eliminate the use of light duty
scaffolding on the part of BFC which it had initially
obligated to provide under Contract No. 1. More
pertinently, the inclusion of the contact square meters of
formwork in the girders is a mere application of one of the
provisions in Contract No. 1, i.e., “BFC agrees to purchase
materials for the formwork as requested by F-E and the
direct cost of those materials will be deducted from this
contract and the balance paid to [Form-Eze].” Form-Eze is
giving ownership of the forming hardware and consumables
which are used on the girders and beams to BFC. Instead of
deducting the cost of these materials from the contract,
Form-Eze will instead include the contact square meters of
formwork in the girder in its billing for the lease of the
deckforms.
As agreed upon by the parties, the 708.12 sq. m. contact
area covered by the grid girders should be included in the
billing. Taking into account this contact area corresponding
the grid girders and the 4,441.73 contact square meters
assembled deckforms, the total contact area is only
5,149.85, which still falls short of the 7,000 contact area
requirement.
To award the full contract price to Form-Eze in Contract
No. 1 is tantamount to unjust enrichment. There is unjust
enrichment under Article 22 of the Civil Code when (1) a
person is unjustly benefited, and (2) such benefit is derived
at the expense of or with damages to another. The principle
of
_______________
27 Id. (Vol. I), p. 204.
186
186 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
unjust enrichment essentially contemplates payment when
there is no duty to pay, and the person who receives the
payment has no right to receive it.28By requiring BFC to
pay the full contract price when it only supplied deckforms
which covered only 5,149.85 contact square meters of
formworks, the CIAC Arbitral Tribunal is essentially
unjustly giving unwarranted benefit to Form-Eze by
allowing it to earn more than it legally and contractually
deserved. It is also worth mentioning that Form-Eze had in
fact only been claiming for the contact area where its
equipment was used.
Therefore, using the computation of BFC, the amount of
contact square meters that the delivered hardware and
deckforms can handle is:
Contract No. 1 be reformed
to include a labor guarantee
provision.
An action for reform a contract is grounded on Article
1359 of the New Civil Code which provides:
When, there having been a meeting of the minds of the
parties to a contract, their true intention is not expressed in
the instrument purporting to embody the agreement, by
reason of mistake, fraud, inequitable conduct or accident,
one of the parties may ask for the reformation of the
instrument to the end that such true intention may be
expressed. 1359. ARTICLE
xxxx
_______________
28 Filinvest Land, Inc. v. Ngilay, 697 Phil. 403, 412-413;
684 SCRA 119, 128-129 (2012).
187
VOL. 813, DECEMBER 7, 2016 187
B.F. Corporation vs. Form-Eze Systems, Inc.
Reformation is a remedy in equity, whereby a written
instrument is made or construed so as to express or conform
to the real intention of the parties, where some error or
mistake has been committed. In granting reformation, the
remedy in equity is not making a new contract for the
parties, but establishing and perpetuating the real contract
between the parties which, under the technical rules of law,
could not be enforced but for such reformation.29
In order that an action for reformation of instrument
may prosper, the following requisites must concur: (1) there
must have been a meeting of the minds of the parties to the
contract; (2) the instrument does not express the true
intention of the parties; and (3) the failure of the
instrument to express the true intention of the parties is
due to mistake, fraud, inequitable conduct or accident.30
In the instant case, the question to be resolved is
whether the contract expressed their true intention; and, if
not, whether it was due to mistake, fraud, inequitable
conduct or accident. While intentions involve a state of
mind which may sometimes be difficult to decipher,
subsequent and contemporaneous acts of the parties as well
as the evidentiary facts as proved and admitted can be
reflective of one’s intention.31
BFC relies on the Form-Eze Proposed SM Marikina Mall
Project Elevated Beam and Slab Formwork dated 7
December 200632 to support its contention that Contract
No. 1 should have a provision on the cost of labor. Indeed,
in the aforementioned proposal, BFC has agreed “to furnish
the labor required for fabrication and assembly of the
forming equipment” and that “BFC will deduct from the
total contract
_______________
29 Multi-Ventures Capital and Management
Corporation v. Stalwart Management Services Corporation,
553 Phil. 385, 391; 526 SCRA 420, 424-425 (2007).
30 Id.
31 Id.
32 Rollo (Vol. I), pp. 198-200.
188
188 SUPREME COURT REPORTS
ANNOTATED
 B.F. Corporation vs. Form-Eze Systems, Inc.
amount P50.00 per man-hour each carpenter or laborer
supplied to Form-Eze.” Notably, Contract Nos. 2 and 3
contain labor-guarantee provisions considering that BFC
has committed to provide the necessary labor for both
contracts.
As initially agreed upon, BFC hired workers for the
assembly of the deckforms since Form-Eze only undertook
to supervise the installation of the deckforms. This was
evident during the cross-examination of Mr. Romano
Clemente (Mr. Clemente) who admitted that no workers of
Form-Eze were employed for the installation of the
deckforms, thus:
ATTY. D. MORGA, JR. (COUNSEL-RESPONDENT):
Since it is the obligation of the Claimant to assemble the
hardware into deckform, how many workers were
employed for the purpose?
MR. R.V. CLEMENTE (CLAIMANT):
We are only supplier sir. We supervise the guys in the
jobsite for them to install all these deckforms.
ATTY. D. MORGA, JR. (COUNSEL-RESPONDENT):
Ano? MR. R.V. CLEMENTE (CLAIMANT):
To install the guys in the jobsite like for example your
laborers carpenters to install this deckforms. We just
only supply one supervisor in the jobsite for him to
supervise the installation of this form.
ATTY. D. MORGA, JR. (COUNSEL-RESPONDENT):
You mean BF Corporation has the expertise to assemble
this.
MR. R.V. CLEMENTE (CLAIMANT):
No, we will supervise your guys for them to assemble
this.
ATTY. D. MORGA, JR. (COUNSEL-RESPONDENT):
Do you know if BF has the expertise to assemble this?
189
VOL. 813, DECEMBER 7, 2016 189
B.F. Corporation vs. Form-Eze Systems, Inc.
MR. R.V. CLEMENTE (CLAIMANT):
That is why we were there in your jobsite. If they
don’t have really the expertise we are the one who
supervise them to install the deckforms. Supervise
them to install the deckforms.
ATTY. D. MORGA, JR. (COUNSEL-RESPONDENT):
You mean no former workers of the Claimant were
employed for the purpose.
MR. R.V. CLEMENTE (CLAIMANT):
No.33
Obviously, BFC would want to be compensated for the
labor it provided to Form-Eze as shown in Contract Nos. 2
and 3.
As a matter of fact, Mr. James Franklin, the President of
Form-Eze conceded that Contract No. 1 should be modified
to include a labor-guarantee provision, to wit:
Q: Mr. Witness, respondent [BFC], in their
counterclaims, would like this Commission to reform
Contract No. 1 to include a provision that it should deduct
from your billing the cost of labor, helmet and expense for
x-bracing supplied by it for the assembly of the form
system, what can you say?
A: [BFC] is allowed to deduct the cost of the x-bracing
purchase from Comer that was used in the FORM-EZE
deck assemblies. [BFC] is allowed to deduct the cost of the
assembly labor for the deckforms which is included in the
Labor Guarantee. These deductions have been reflected in
all our billings where the P75.00 Labor Guarantee has been
applied. The cost of helmet is not included and should not
be included. Contract No. 1 is only a lease contract but it Expenses for x-bracing and the
was modified to include a Labor Guarantee. For the [BFC] cost of labor should be deducted
to deduct from our billing the cost of labor, etc. which under Contract Nos. 2 and 3.
allegedly they supplied for the use of our said equipment for Except for the expenses for x-bracing used in deck
the assembly thereof is included in the Labor Guarantee. assemblies which had been admitted by Form-Eze
They President James Franklin, BFC is not entitled to be
reimbursed for the cost of helmets, petroleum, and oil
_______________ lubricants in the absence of any stipulations in the
contracts. The cost of labor, on the other hand, should be
33 Rollo, pp. 861-862; TSN, 13 August 2007. deducted pursuant to the labor-guarantee provisions in
Contract Nos. 2 and 3.
The cost for x-bracing amounts to P358,250.00 as
190
evidenced by the receipt issued by Comer.35
190 SUPREME COURT REPORTS
_______________
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc. 34 See Judicial Affidavit of Mr. James W. Franklin; id.,
should be allowed to do so in conformance with the Labor at pp. 287-288.
Guarantee but definitely the cost of helmet and their other 35 Id. (Vol. I), p. 482.
claims of deductions would not have any basis at all since
these have not been agreed upon both in the original
contract and in the subsequent agreement as contain (sic)
in the February 8, 2007 signed letter.34 191
VOL. 813, DECEMBER 7, 2016 191
B.F. Corporation vs. Form-Eze Systems, Inc.
This admission by Form-Eze bolsters the conclusion that The costs of labor are as follows:
the parties intended to include a labor-guarantee provision Contract No. 1 = P453,294.50
in Contract No. 1. Both Contract Nos. 2 and 3 set the labor Contract No. 2 = P1,373,634.60
rate at P60.00 per carpenter man-hour. BFC fixed the cost Contract No. 3 = P273,240.00
of labor at P453,294.50. Obligation of BFC under Contract No. 1.
Considering that both parties admitted that there 92,696.40 contact square meters x P225.00 =
should be a labor guarantee clause in Contract No. 1, it can P20,856,690.00
be reasonably inferred that the failure to include said Less: Amount paid 7,700,000.00
provision was due to mistake. A reformation is in order to Payment for billing for Pour 1 487,828.05
include a cost of labor provision in Contract No. 1. Cost of labor 453,294.50
 Cost of X-bracing 358,250.00 way be interpreted as part of the deckform supplied by
_____________ Form-Eze. As pointed out by BFC, the scaffoldings and
P11,857,317.45 accessories were the responsibility of BFC under Contract
No. 1. Thus, the manufactured hardware under Contract
The Memorandum of Agreement No. 4 could not have added to the deckform system because
dated 5 January 2007 is an ex- they are not the equipment of Form-Eze had obligated itself
clusive licensing agreement. to supply under Contract No. 1.

BFC avers that CIAC erred when it stated the BFC was Obligation of BFC under
given the exclusive license to manufacture Form-Eze’s Contract No. 2.
equipment consisting of scaffoldings and accessories and
they became part of that provided by Form Eze to BFC. BFC maintains that since Form-Eze failed to meet the
At the outset, we agree that the subsequent minimum conditions under Contract No. 1 where the
Memorandum of Agreement executed by the parties on 5 minimum 126,000 contact square meters were not reached,
January 2007 is an exclusive licensing agreement. It was then the forklifts under Contract No. 2 were also not used
signed by both parties wherein BFC has agreed to sell the for a minimum of 126,000 contact square meters.
scaffolding frames and accessories it manufactured to We agree. BFC is liable only to pay the amount
Form-Eze at the end of the project. This Agreement was proportionate to 92,696.40 contact square meters at P50.00
incorporated in Contract No. 4 wherein BFC will be allowed per contact square meter, the rental rate for the forklifts.
to deduct P6,352,500.00 from the equipment lease contract, Thus:
which is presumably Contract No. 1. At this point, Contract
No. 4 is deemed to have novated the obligation of BFC with 92,696.40 contact square meters x P50.00 = P4,634,820.00
respect to furnishing all scaffoldings. Contract No. 1 states Less: Payments made 990,000.00
that BFC shall furnish the scaffoldings at no cost to Form- Cost of Labor 1,286,377.50
Eze. On the other hand, Contract No. 4 requires BFC to sell _____________
the scaffoldings to Form-Eze at the SUBTOTAL P2,358,442.50

Obligation of BFC
192 under Contract No. 3.
192 SUPREME COURT REPORTS
ANNOTATED The CIAC had correctly noted the ambiguity in Contract
B.F. Corporation vs. Form-Eze Systems, Inc. No. 3, particularly the “sufficient number of columnforms as
required to complete six (6) poured in place columns per
end of the project and deduct the cost of the same from the
day.” For BFC, the sufficient number of columnforms is 12
contract price of Contract No. 1. This setup cannot in any
sets a day while Form-Eze considered its supply of six (6)
full height built up columnforms as sufficient. The CIAC BFC is then liable to pay P441,502.87 broken down as
found that follows:
1,516.67 x P355.00 = P538,417.85
Less: Cost of Labor 96,915.00
193 _____________
VOL. 813, DECEMBER 7, 2016 193 SUBTOTAL: P441,502.87
B.F. Corporation vs. Form-Eze Systems, Inc.
Form-Eze failed to comply with the requirements under
194
Contract No. 3, hence it merely awarded Form-Eze 2/3 of
194 SUPREME COURT REPORTS
the minimum contract amount at P2,153,666.67.
We find that the CIAC’s award lacked bases. It gave ANNOTATED
credence to the methodology used by Form-Eze and noted B.F. Corporation vs. Form-Eze Systems, Inc.
that the latter had supplied six (6) full height built-up BFC is obliged to pay rental for
columnforms, albeitinsufficient. We hold the contrary. The u-heads under Letter-Agreement
methodology used by BFC, which involves “columnforms dated 5 January 2007.
with window openings and that from its installation,
alignment, bracing, inspection, approval of alignment, Under the letter dated 8 February 2007, “BFC has
verticality and rigidity of the erected columnforms, pouring, completed fabrication on a sufficient quantity of u-heads
drying and removal of the forms, it will require twelve (12) with screw assemblies and heavy-duty bases so that BFC
columnforms a day, should have been considered. The CIAC can immediately start returning the 24-inch and 18-inch u-
itself had already ruled that the ambiguity in Contract No. head assemblies (561 pcs.) and heavy-duty bases (483 pcs.)
3 should not favor Form-Eze, the party who prepared the which were on temporary loan to BFC by [Form-Eze] until
contract. Thus, it is only logical that the methodology BFC could manufacture their own equipment. The
employed by BFC should be credited. temporary loan was expected to be approximately [two] (2)
Using 12 columnforms as the minimum requisite and weeks and the equipment was picked up January 9, 2007
Form-Eze having supplied only four (4) usable and still in used today.”36 It is understood that upon
columnforms, it can be established that the delivered expiration of the two-week temporary loan and upon failure
columnforms can only be used for 1/3 portion of the 9,100 by BFC to return the equipment, it is then liable to pay for
contact square meters or 3,033.33 contact square meters. It rent. We find that the monthly rental amount of P96,600.00
was further proven by BFC that about 50% of the was substantiated by Form-Eze. 483 pieces of 24 inch and
columnform requirements of the project were already 18 inch galvanized adjustable heads and 483 pieces of
completed with the use of their own equipment. Thus, it is galvanized heavy-duty plates were indeed delivered to BFC
but equitable that the 3,033.33 contact square meters be as evidenced by the delivery receipts.37 According to Mr.
further reduced by 50% or 1,516.67 contact square meters. Clemente, Form-Eze’s Sales Engineer, the rental amount
for adjustable u-heads are fixed at P160.00 per unit, while
the galvanized heavy-duty plates are at P40.00 per
unit.38 By agreeing to the terms of the 8 February 2007
Letter, BFC is deemed to have acquiesced to the rental fee
in case it failed to return the u-heads and plates on time.
Therefore, we affirm the CIAC’s ruling that BFC is liable to
pay rental of the equipment in the amount of P96,000.00
per month until the equipment leased is fully returned to
Form-Eze.
_______________
36 Id., at p. 204.
37 Id., at pp. 324-325, 330 and 334.
38 Id., at p. 387. Judicial Affidavit of Mr. Clemente.
195
VOL. 813, DECEMBER 7, 2016 195
B.F. Corporation vs. Form-Eze Systems, Inc.
BFC President should not be
included as party to this case?
Section 4 of Executive Order No. 1008 vests jurisdiction
on CIAC over disputes disputes arising from, or connected
with, contracts entered into by parties involved in
construction in the Philippines, whether the dispute arises
before or after the completion of the contract, or after the
abandonment or breach thereof. Moreover, the party
involved must agree to submit to voluntary arbitration. In
other words, anyone who is not a party to the contract in
his personal capacity is not subject to the jurisdiction of the
CIAC. In this case, Pineda signed the challenged contracts
in his capacity as President of BFC. There is no indication
that he voluntarily submitted himself as a party to the
arbitration case. In fact, he has been consistently contesting
his inclusion as a respondent in the CIAC proceedings.
CIAC however considered Pineda as a joint tortfeasor, thus
justifying his joinder as a codefendant.
We do not consider the imputed acts of Pineda as
an indicia of bad faith to classify him as a joint
tortfeasor. First, it was proven that Form-Eze is not
entitled to all its monetary claims under the
contract. Second, we have also subscribed to BFC’s position
that Contract No. 1 should have included a labor guarantee
provision and that it was by mistake that said clause was
excluded. Third, BFC’s alleged refusal to return the u-head
assemblies and heavy-duty bases was meted with a heavy
penalty in the form of a huge rental fee. BFC had, as a
matter of fact, admitted to owing Form-Eze rental
payment. Fourth, the claim of threat against Form-Eze’s
President is unsubstantiated and uncorroborated.
Attorney’s Fees and Costs
of Arbitration.
The controversy essentially boils down to the
interpretation and factual application of the existing
contracts. Neither
196
196 SUPREME COURT REPORTS
ANNOTATED
B.F. Corporation vs. Form-Eze Systems, Inc.
party was able to prove bad faith in their dealing with each
other. Under Article 2208 of the Civil Code, attorney’s fees
may, among others, be recovered where defendant acted in
gross and evident bad faith in refusing to satisfy the
plaintiff’s plainly valid, just and demandable claim. We
observe that in filing the complaint against BFC, Form-Eze
was merely seeking payment for its service under the 197
contract. BFC had admitted to its obligation. The problem VOL. 813, DECEMBER 7, 2016 197
lies only on the amount to be paid. This is not tantamount B.F. Corporation vs. Form-Eze Systems, Inc.
to bad faith.
Finally, both parties should equally share the costs of Petition partially granted, judgment and resolution
arbitration since their prayers were only partially modified.
granted.39
Notes.—The Supreme Court (SC) has ruled that when a
WHEREFORE, the petition is PARTIALLY dispute arises from a construction contract, the
GRANTED. The Decision dated 15 January 2010 and Construction Industry Arbitration Commission (CIAC) has
Resolution dated 13 July 2010 are MODIFIED. Petitioner exclusive and original jurisdiction. (Stronghold Insurance
B.F. Corporation is ordered to pay respondent Form-Eze Company, Inc. vs. Stroem, 746 SCRA 598 [2015])
Systems, Inc. the following amounts: Under Article 22 of the Civil Code, there is unjust
Under Contract No. 1: P11,857,317.45 enrichment when (1) a person is unjustly benefited and (2)
2,358,442.50 Under Contract No. 2: such benefit is derived at the expense of or with damages to
441,502.87 Under Contract No. 3: another. (Bliss Development Corp./Home Guaranty
Under Letter-Agreement Corporation vs. Diaz, 765 SCRA 453 [2015])
560,000.00 dated 7 January 2007:
GRAND TOTAL: P15,217,262.82 ——o0o——
and 50% of the Cost of Arbitration. © Copyright 2019 Central Book Supply, Inc. All rights
reserved.
SO ORDERED.
Velasco, Jr. (Chairperson), Del
Castillo,**Reyes and Jardeleza, JJ., concur.

_______________

39 Filipinas (Pre-Fab Bldg.) System, Inc. v. MRT

Development Corporation, 563 Phil. 184, 218; 537 SCRA
609, 642 (2007).
** Designated additional member per Raffle dated 5
December 2016.